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Nigeria raises $2.86bn eurobonds to fund fiscal deficit, financing needs as high investor interest sees offer come in at $9.5bn

Nse Anthony-Uko

Nse Anthony-Uko is Abuja editorial lead at business a.m. covering finance, business, economy, federal government economic MDAs and FCT

November 15, 2018589 views0 comments

The Nigerian government on Wednesday night said it has successfully raised $2.86 billion triple series notes under its Global Medium Term Note Programmme even as the offering received a combined interest of over $9.5 billion.

The offering has attracted significant interest from leading global institutional investors with a peak combined order book of over $9.5 billion, which reflects an over-subscription of more than three times and demonstrates the on-going confidence of international capital market investors in Nigeria’s investment story.

The triple series notes  under its Global Medium Term Note Programme include a $1.18 billion 7-year series, $1.00 billion 12-year series and a $750 million 30-year series.

The 7-year series will bear interest at a rate of 7.625 percent, while the 12-year series will bear interest at a rate of 8.75 percent, and the 30-year series will bear interest at a rate of 9.25 percent.

With this, despite significant oil and wider macro market volatility, Nigeria has successfully raised its external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across sub-Sahara Africa.



The successful transaction follows closely behind Nigeria’s successful engagement with the Fitch rating agency, and their subsequent decision to change the outlook on Nigeria’s sovereign rating from B+ (negative) to B+ (stable), based on improving macro-economic fundamentals.

In each case of the notes, they will be repayable with a bullet repayment of the principal on maturity. The offering is expected to close on or about 21 November, 2018, subject to the satisfaction of various customary closing conditions.

Nigeria intends to use the proceeds of the notes towards funding of its fiscal deficit and other financing needs.

The notes represent Nigeria’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.

When issued, 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 government said it may apply for the notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.

The pricing was determined following a series of meetings with investors in London and conference calls with investors globally attended by the Nigerian delegation, which comprised Zainab Shamsuna Ahmed, minister of finance; Udoma Udo Udoma, minister of budget and national planning; Godwin Emefiele, governor, Central Bank of Nigeria; Patience Oniha, director general of the Debt Management Office (DMO) and Ben Akabueze, director general of the Budget Office of the Federation, .

The joint lead managers for the issuance were Citibank Global Markets Limited and Standard Chartered Bank and the financial advisors were FSDH Merchant Bank Limited.

Commenting on the successful pricing, Zainab Ahmed, Nigeria’s finance minister said: “Nigeria is investing strategically in critical capital projects to bridge our infrastructure deficit, provide a better operating environment for the private sector, and improve the standard of living of our citizens.

“The proceeds of this issuance will provide critical financing for projects in transportation, power, agriculture, housing, healthcare and education as well as the capital elements of our social investment programmes. Nigeria’s Economic Recovery and Growth plan is delivering results.”

Also, Patience Oniha,  DMO director general,  said: “Nigeria’s continued ability to access the international markets to raise capital is a testament to investor’s confidence which has been supported by continuous engagement with them on various reform initiatives and outcomes.

“The issuance of the Eurobonds, which received the prior approval of the executive and legislative arms of government, will not only provide capital to finance various projects, but also contribute towards the achievement of the Debt Management Strategy,” she said. 

“The ability to raise $2.86 billion, which is the exact amount government needed in volatile and challenging market conditions has been described as a stellar outcome,” according to a statement by Paul Ella Abechi, special adviser to the minister of finance, on media and communications.

Read Also:

  • Fiscal financing threatens Nigeria’s macroeconomic stability, says Fitch
  • Nigeria’s pension fund assets rise by N238bn in November, says PenCom
  • SDG: Covid-19 magnifies financing gap in developing countries by 70%, says OECD
  • Decent first 2021 auction for DMO, but drive to finance FGN deficit…
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