Nigeria raises $4bn via Eurobonds, “biggest financial trade in Africa”

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The Debt Management Office (DMO) says Nigeria has raised $4 billion via Eurobonds, describing the feat as “one of the biggest financial trade to come out of Africa in 2021.”

 

According to the DMO, the Order Book peaked at $12.2 billion, which enabled the Federal Government to raise $1 billion more than the $3 billion it initially announced.

 

“This exceptional performance has been described as one of the biggest trades to come out of Africa in 2021 and an excellent outcome. 

 

“Bids for the eurobonds were received from investors in Europe and America as well as Asia.

 

“There was also good participation  by local investors. The size of the Order Book and the quality of investors demonstrates confidence in Nigeria,”  said the Debt Management Office in a press release.

 

The Eurobonds were issued in three tranches: 7 years ($1.25 billion at 6.125% per annum); 12 years ($1.5 billion at 7.375% per annum); and 30 years ($1.25 billion at 8.25% per annum).

 

The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023.

 

Since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of USD4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act.

Meanwhile, the government had arranged a two-day call with investors last week and on Monday, with the DMO saying that the bond would be priced following the meetings.

 

The notice set September 28 for the bond settlement, which will be listed on the London and Nigerian Stock Exchanges.

 

The Eurobonds are part of a government plan to raise 2.343 trillion Naira ($5.71 billion) in external financing to help fund spending in 2021 and to partly finance the 5.6 trillion Naira deficit.

 

The DMO issued the debt in tranches of three tenors. It raised $1.25 billion for seven years at a yield of 6.125% and sold a 12-year bond at 7.375% to fetch $1.5 billion. A 30-year tranche of $1.25 billion was sold at 8.25%.

 

On the upcoming Eurobond issue, Nigeria chose JPMorgan, Citigroup, Standard Chartered, and Goldman Sachs, as well as local firm Chapel Hill Denham.

 

Amaka E. Nliam/DMO/Nairametrics

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