Investor confidence may be returning to Nigeria as the country’s latest Eurobond offer, which closed on Monday, recorded over $9 billion oversubscription.
The offer marks Nigeria’s successful return to the international capital markets for the first time in over two years.
The proceeds from the dual-tranche Eurobond offering under the Global Medium Term Note Programme will be used to finance the 2024 fiscal deficit and support the government’s budgetary needs, according to the Debt Management Office (DMO).
The Eurobond targeted issuance of $1.7 billion but the Federal Government took $2.2 billion across both bonds despite a $9 billion oversubscription.
The Federal Government sold $700 million worth of the 6.5-year Eurobond maturing in 2031 at a coupon rate of 9.625 per cent and $1.5 billion of the 10-year tenure at 10.375 per cent.
DMO, in a statement on Monday, said 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 Federal Republic of Nigeria successfully priced $2.2 billion in Eurobonds maturing in 2031 (6.5-year) and 2034 (10- year) in the international capital markets on 2 December 2024, with $700 million and $1.5 billion placed in the 2031 and 2034 maturities, respectively,” DMO said.
“The transaction attracted a peak orderbook of more than $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,” it said.
It described the oversubscription as an “expression of continued investor confidence in the country’s sound macro-economic policy framework and prudent fiscal and monetary management”.
DMO’s Director General, Patience Oniha, also cited strong investor demand while reaffirming DMO’s commitment to transparency and continued engagement with investors.
A consortium of international and domestic financial institutions, including Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., and Standard Chartered Plc, managed the Eurobond sale, with Chapel Hill Denham Advisory Limited acting as the Nigerian bookrunner.
DMO said 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.
In his reaction, Minister of Finance, Wale Edun, said the strong investor interest in the Eurobonds was a sign of increasing confidence in Nigeria’s economic direction and the confidence in the President Bola Tinubu administration’s efforts to stabilise the economy and promote sustainable growth.
“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,” he said.
Edun had said in November that approximately $1.7 billion was expected from the Eurobond offer and $500 million from a sukuk financing to strengthen the country’s finances and support economic reforms.
Governor of the Central Bank of Nigeria, Olayemi Cardoso, also highlighted the positive outcome as a reflection of investor confidence and Nigeria’s improved liquidity and market access.
