Nigeria Sells $4bn Eurobond As Investors Oversubscribe Four Times

After two days of meeting with foreign investors, Nigeria has raised the sum of $4 billion through Eurobonds, with demand exceeding quadruple the amount on offer.

According to a recent statement by the Debt Management Office (DMO), the Order Book peaked at $12.2 billion which enabled the Federal Government of Nigeria (FGN) to raise $1 billion more than the $3 billion it initially announced.

“This exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021 and an excellent outcome”, said the DMO in a statement. “The size of the Order Book and the quality of investors demonstrate confidence in Nigeria.”

Nigeria opened its order book for the bond offering on Tuesday, aiming to issue the bond next week. The debt was issued by Nigeria 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%.

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.

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

The Eurobonds are part of the government plan to raise N2.343 trillion ($5.71 billion) in external financing to fund spending in 2021 and to partly finance the 5.6 trillion naira deficit.

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, raising $4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Application Act.