Nigeria has raised $2.2 billion through its latest Eurobond auction, which saw the issuance of two bonds with varying tenors, follows the government’s return to the international capital markets for the first time since March 2022.
The funds raised will primarily be used to support Nigeria’s 2024 budget.
Details of the auction show that while a total subscription of over $9 billion was recorded, only $2.2 billion was allotted.
The allotments are $700 million for the 6.5-year bond priced at 9.62 per cent and a larger $1.5 billion for the 10-year bond priced at 10.375 per cent.
The bonds were issued under the Regulation S/144A structure, making them available to both U.S. and international investors.
Oversubscription of the bonds is a reflection of continued investor interest in Nigerian debt, though the yields have raised concerns about the country’s financial stability.
In a statement, the Debt Management Office (DMO) announced the successful issuance of the Eurobonds.
The DMO noted that the bonds attracted a wide range of investors from multiple jurisdictions including the United Kingdom, North America, Europe, Asia, Middle East and participation from Nigerian investors.
The statement read: “The Federal Republic of Nigeria (the “Republic”) successfully priced US$2.2 billion in Eurobonds (the “Notes”) maturing in 2031 (6.5-year) and 2034 (10- year) in the international capital markets on 2 December 2024, with US$700 million and US$1.5 billion placed in the 2031 and 2034 maturities, respectively. The 6.5-year and the 10- year. 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, which it views as 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 US$9.0 billion. This underscores the strong support for the transaction across geography and investor class. With respect to investor class, demand came from a combination of Fund Managers, Insurance and Pension Funds, Hedge Funds, Banks and other Financial Institutions.”
The statement quoted Finance Minister, Olawale Edun, to have emphasised the confidence in President Bola Tinubu’s administration’s efforts to stabilise the Nigerian economy and promote sustainable growth. He noted the strong investor interest in the Eurobonds as a sign of increasing confidence in Nigeria’s economic direction.
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, was also said to have highlighted the positive outcome as a reflection of investor confidence and Nigeria’s improved liquidity and market access.
Director-general of DMO, Patience Oniha, also celebrated the landmark achievement, citing strong investor demand (4.18x the offer size) and the competitive pricing of the new 6.5-year and 10-year Notes, which were set at 9.625 per cent and 10.375 per cent, respectively. The DMO also reaffirmed its commitment to transparency and continued engagement with investors.
