In a significant move to address its fiscal challenges, Nigeria has raised $2.2 billion in Eurobonds from the international capital markets.
The funds will be used to finance the country’s 2024 budget deficit and support government spending.
The Debt Management Office (DMO) announced on Monday that the bonds will mature in 2031 and 2034.
The $700 million portion will mature in six and a half years, while the $1.5 billion tranche will mature in ten years.
The Eurobonds were priced with yields of 9.625% and 10.375%, respectively.
The DMO described the issuance as a success, highlighting the diverse range of investors who participated.
According to the DMO, investors from the UK, North America, Europe, Asia, the Middle East, and Nigeria showed strong interest in the bonds.
“This transaction underscores investor confidence in Nigeria’s macroeconomic policies and fiscal management,” the DMO stated.
The bond issuance attracted a peak order book of over $9 billion, reflecting high demand from global investors.
Participants included fund managers, insurance companies, pension funds, hedge funds, and banks.
Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, praised the outcome.
“This successful issuance shows growing confidence in President Bola Ahmed Tinubu’s administration and its efforts to stabilize the economy,” Edun said.
He added that the broad investor interest is encouraging as Nigeria works to diversify its funding sources.
The proceeds will help bridge Nigeria’s budget deficit and support key government programs in 2024.
Governor of the Central Bank of Nigeria, Olayemi Cardoso, also commended the move.
“This is evidence of improved investor confidence in Nigeria’s creditworthiness and access to international markets,” Cardoso said.
The bonds will be listed on the London Stock Exchange, the FMDQ Securities Exchange Limited, and the Nigerian Exchange Limited.
Nigeria mandated top financial institutions, including Citigroup, Goldman Sachs, J.P. Morgan, and Standard Chartered Bank, as joint bookrunners for the issuance.
Chapel Hill Denham and FSDH Merchant Bank Limited also played advisory roles.
Experts view this Eurobond issuance as a critical step in Nigeria’s economic recovery.
The funds will provide much-needed liquidity for government projects and initiatives.
However, concerns remain about Nigeria’s rising debt levels and the cost of servicing these bonds.
Economic analysts warn that while Eurobonds offer immediate relief, they come with long-term financial obligations.
Nigeria’s public debt has been a subject of debate, with critics urging caution in borrowing.
Despite these concerns, the government remains optimistic about its fiscal strategies.
Olawale Edun emphasized that the funds will be used responsibly to achieve sustainable growth.
The government’s focus, he said, is on creating a more inclusive economy that benefits all Nigerians.
