Nigeria’s $2.35 billion Eurobonds attract largest ever order book of $13 billion

Nigeria’s $2.35 billion Eurobond offer, which went up for sale on Wednesday, attracted an order book in excess of $13 billion, signaling the highest-ever demand level recorded by Africa’s biggest crude producer in its debt issuance.

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That makes the offer 453.2 per cent oversubscribed, a testament to blossoming investor confidence in the Nigerian economy, which took a hit from two recessions in the four years to 2020.

The transaction drew strong interest and demand from big institutional investors including pension and insurance funds, hedge funds, fund managers, banks and other financial institutions, according to a statement by the debt office.

The Debt Management Office (DMO) noted that the sovereign bond issuance appealed to investors in jurisdictions as diverse as Asia, Europe, the Middle East, the UK, North America and participation from local investors.

“We are delighted by the strong investor confidence demonstrated in our country and reform agenda,” the agency quoted President Bola Tinubu as saying.

“This development reaffirms Nigeria’s position as a recognised and credible participant in the global capital market,” he added.

The transaction offered two tranches comprising a 10-year note maturing in 2036 and a 20-year bond maturing in 2046, valued at $1.25 billion and $1.10 billion respectively.

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The longer-dated debt was priced at a coupon of 9.13 per cent, while the shorter-dated bond was priced at 8.63 per cent.

“This successful market access demonstrates the international community’s continued confidence in Nigeria’s reform trajectory and our commitment to sustainable, inclusive growth,” Minister of Finance and Co-ordinating Minister of the Economy Wale Edun was quoted as saying.

The government hopes to deploy the proceeds of the capital raise into bridging the funding gap in this year’s budget and in meeting other financing needs.

The DMO said there are plans to admit the bonds to the official list of the UK Listing Authority and make them available for trade on the London Stock Exchange regulated market and on the Nigerian Exchange Limited.

Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan and Standard Chartered Bank were the joint bookrunners.

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Nigeria’s improved fiscal position, which has been boosted by a myriad of reforms in banking, insurance, pensions, tax among others in addition to a removal of costly petrol subsidies, a return to orthodox monetary policy and currency reforms are positioning it as a viable haven for foreign portfolio investments.

Recent credit rating upgrades by Moody’s and Fitch as well as its recent exit from the grey list of the Financial Action Task Force has strengthened its creditworthiness among emerging market economies.