The federal government is weighing whether to sell more debt this year following the success of its Eurobond offering.
The government raised $4 billion from international investors Tuesday after receiving offers for four times the $3 billion it had initially targeted. Yields on the multi-tranche loans ranged from 6.125 per cent for the seven-year tenor, and 8.25 per cent for its 30-year issue.
Finance Minister Zainab Ahmed said last month the government is targeting raising $6.1 billion this year, with half of that amount expected to come from bilateral and multilateral sources.
The country might seek to raise the whole amount through the sale of Eurobonds “if tenors and pricing are good,” Debt Management Office Director-General Patience Oniha said. “We will monitor the markets while still exploring other sources,” she said in an emailed response to questions.
The Order Book peaked at $12.2 billion which enabled the Federal Government of Nigeria (FGN) to raise $1 billion more than the $3 billion it initially announced, DMO said.
The Debt Management Office (DMO) in a statement Wednesday in Abuja said this exceptional performance has been described as “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.
According to the statement, “Bids for the Eurobonds were received from investors in Europe and America, as well as Asia. There was also good participation by local investors. The size of the Order Book and the quality of investors demonstrates confidence in Nigeria.”
“The Eurobonds were issued in three tranches, details below:
7 years – $1.25 billion at 6.125% p.a
12 years – $1.5 billion at 7.375% p.a
30 years – $1.25 billion at 8.25% p.a
“The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023,” the statement explained.
