- FG has raised $2.2 billion in Eurobond to fund the 2024 budget deficit
- The 2031 and 2034 notes were priced at coupon and re-offer yields of 9.625 per cent and 10.375 per cent, respectively
- The Eurobonds attracted investors from multiple jurisdictions
The Federal Government has raised $2.2 billion in Eurobonds to fund the fiscal deficit in the 2024 budget.
According to a statement by the Debt Management Office (DMO), the bonds will mature in the international capital markets in 2031 (6.5-year) and 2034 (10-year).
The statement noted that the funds have $700 million and $1.5 billion placed in the 2031 and 2034 maturities, respectively.
The 6.5-year and 10-year notes were priced at coupon and re-offer yields of 9.625 per cent and 10.375 per cent, respectively.
The DMO said, “The Federal Government has successfully priced US$2.2 billion in Eurobonds maturing in 2031 (6.5-year) and 2034 (10-year) in the international capital markets.
“The proceeds from this Eurobond issuance will be used to finance the 2024 fiscal deficit and support the government’s budgetary needs.”
The notes will 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.
The country mandated Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan, and Standard Chartered Bank as Joint Bookruuners, while FSDH Merchant Bank Limited acted as Financial Adviser on the issuance.
Eurobonds attracted wide-ranging investors
The $2.2 billion Eurobonds attracted investors from multiple jurisdictions including the United Kingdom, North America, Europe, Asia, Middle East, and participation from Nigerian investors.
The transaction attracted a peak order book of more than $9.0 billion.
The investor class was a combination of fund managers, insurance and pension funds, hedge funds, banks, and other financial institutions.
Comments on the Eurobonds
On the successful pricing of the Eurobonds, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said it shows increasing confidence in the government’s efforts to stabilise the economy.
He said, “Today’s successful issuance signposts increasing confidence in ongoing efforts of the President Bola Ahmed Tinubu administration to stabilise the Nigerian economy and position it on the path of sustainable and inclusive growth for the benefit of all Nigerians.
“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.”
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said the offerings are evidence of an improved liquidity position.
He said, “This outcome underscores the growing confidence of investors and the resilience of the Nigeria credit, and evidence of our improved liquidity position and continued access to international markets to support the financing needs of the government.”
Director-General of the DMO, Patience Oniha, said the successful pricing is a landmark achievement for Nigeria in the international capital market.
Oniha said, “With the successful pricing of the notes on an intra-day basis, Nigeria has registered a landmark achievement in the international capital market. The size of the Order book at approximately 4.18x of the offer amount and the strong and diverse investor base helped to price the new 6.5-year at 9.625 per cent, while the new 10-year notes were priced at 10.375 per cent.
“The DMO remains committed to maintaining transparency and open communication with investors and stakeholders and appreciates the continued confidence and support of the international and Nigerian investors who participated in the pricing.”
40% of African countries face rising debt crisis – ECA
Earlier, TheRadar reported that the United Nations Economic Commission for Africa (ECA) raised alarm over rising debts across Africa, saying that 40 per cent of countries on the continent are either in debt distress or at high risk.
The commission said it is worried that most African nations in the crisis are appropriating more funds to debt interest payments than to critical sectors that could stimulate development.
