Nigeria has announced plans to go back to the global market for the issuance of N2.343 trillion ($6.2 billion) Eurobonds to part-finance the N5.2 trillion 2021 budget deficit.
This is coming three years after it issued a debt instrument in the International Capital Market (ICM) with a $2.5 billion aggregate Eurobonds under its Global Medium Term Note Programme.
The Debt Management Office (DMO) disclosed that it had secured virtual meetings with investors holding from today to September 20th, 2021, in respect of the Eurobonds.
On August 5, the federal government announced the appointment of eight international and domestic transaction advisers for the proposed Eurobond offer.
In order to avail domestic investors the opportunity to invest in the Eurobonds, the debt management agency said meetings would also be held with local investors. This is the first time local investors would be included in the road shows, a development DMO explained was one of the reasons a Nigerian Bookrunner (Chapel Hill Denham Advisory Services Ltd.) was appointed among the transaction advisers.
“Through the Eurobond issuance, Nigeria is expected to raise up to $3 billion but no more than $6.2 billion.
“In addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of Eurobonds by Nigeria benefits the country in many other strategic ways,” DMO stated.
It further stated that the Eurobonds issuance will also bring about an inflow of foreign exchange, leading to an increase in external reserves to help support the naira exchange rate as well as Nigeria’s sovereign rating, adding that when Nigeria raised funds externally through Eurobonds, it freed up space in the domestic market for private sector and sub-national borrowers.
Nigeria has a sovereign yield curve in the ICM, extending up to 30 years.
The agency observed that the local listing of Nigeria’s Eurobonds on the Nigerian Exchange Limited and the FMDQ Securities Exchange Limited had increased the range of products on the two exchanges and their respective market capitalisation.
The DMO explained that overall, Eurobond issuance by Nigeria and the investor meetings that precede the pricing, had provided a strong global platform for Nigeria to tell itsown story and opportunities available in Nigeria for investors.
