Nigeria has raised $4 billion through the issuance of Eurobonds, an amount that is $1 billion more than what the government planned, the Debt Management Office (DMO) has announced.

The government plans to use the proceeds of the borrowing from foreign investors to finance a part of the 2021 budget deficit.

The DMO had announced on Thursday that the federal government planned to issue fresh Eurobonds to raise $3 billion and not more than $6.2 billion (N2.6 trillion) for the financing of the 2021 budget.

The budget has a deficit of N5.6 trillion, and the Eurobonds are part of the government’s plan to raise N2.3 trillion in external financing to close the gap.

The DMO had arranged a two-day virtual call with investors last week, and investors from America, Europe and Asia demanded more than four times the bond amount on offer, with demand peaking at $12.2 billion, the debt office said in a statement.

The statement said that the performance has been described as “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.

“The size of the Order Book and the quality of investors demonstrates confidence in Nigeria,” it says.

The debt office had earlier said it would work with JPMorgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners, and the Nigeria-based Chapel Hill Denham on the bonds issue.

The bonds were issued in three tranches: $1.25 billion at 6.125 per cent rate and maturity of seven years; $1.5 billion at 7.375 per cent with a 12-year maturity, and $1.25 billion at 8.25 per cent per annum with 30 years maturity.

“The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023,” the DMO said.

Governments use Eurobonds, a foreign currency denominated debt instrument, to borrow from the international market.

The Nigeria bonds will be listed on the Nigerian and London Stock Exchanges.


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