Nigeria prices $2.2bn in 6.5-year, 10-year Eurobonds to finance budget deficits

Nigeria has successfully priced 2.2 billion dollars in Eurobonds maturing in 2031 and 2034 in the international capital markets.

This is according to a statement by the Debt Management Office (DMO) in Abuja on Monday.

The DMO said that the two Eurobonds, with 6.5 years and ten years tenors, have 700 million dollars placed in the 2031 maturity, and 1.5 billion dollars placed 2034 maturity.

It said that the notes were priced at a coupon and re-offer yield of 9.625 per cent and 10.375 per cent, respectively.

“Nigeria is pleased to have attracted a wide range of investors from multiple jurisdictions including the United Kingdom, North America, Europe, Asia, Middle East and participation from Nigerian investors.

“It is an expression of continued investor confidence in the country’s sound macro-economic policy framework and prudent fiscal and monetary
management.

“The transaction attracted a peak orderbook of more than nine billion dollars. This underscores the strong support for the transaction across geography and investor class,” the DMO said.

It said that with respect to investor class, demand came from a combination of fund managers, insurance and pension funds, hedge funds, banks and other financial institutions.

Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said that the successful issuance signposted increasing confidence in the ongoing efforts of the government to stabilise the Nigerian economy.

According to Edun, the broad range of investor appetite to invest in our Eurobonds is encouraging as we continue to diversify our funding sources and deepen our engagement with the international capital markets.

Also, the Governor of the Central Bank of Nigeria, Yemi Cardoso, said that the outcome underscored the growing confidence of investors and the resilience of the Nigeria credit.

“It is evident of our improved liquidity position and continued access to international markets to support the financing needs of the government,” Cardoso said.

The Director-General of the DMO, Patience Oniha, said that with the successful pricing of the notes on intra-day basis, Nigeria had registered a landmark achievement in the international capital market.

Oniha said that the size of the orderbook at approximately 4.18 times of the offer amount, and the strong and diverse investor base helped to price the new 6.5-year tenor at 9.625 per cent interest rate.

She said that it also helped to price the new 10-year notes at 10.375 per cent interest rate.

“The DMO remains committed to maintaining transparency and open communication with investors and stakeholders, and appreciates the continued confidence and support of the international and Nigerian investors who participated in the pricing,” she said.

She said that the notes would be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market, the FMDQ Securities Exchange Limited, and the Nigerian Exchange Limited.

“The proceeds from this Eurobond issuance will be used to finance the 2024 fiscal deficit and support the government’s budgetary needs.

“Nigeria mandated Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan and Standard Chartered Bank as Joint Bookrunners. FSDH Merchant Bank Limited acted as Financial Adviser on the issuance,” she said.