…Exceeds Planned $3bn Offer
September 22, (THEWILL) – The Nigerian Government has confirmed that it has successfully raised the sum of $4 billion through Eurobonds.
In a release issued Tuesday by the Debt Management Office, DMO, the agency said the deal was concluded after an intensive two-days of virtual meeting with investors across the globe.
It also said that the deal attracted good participation by foreign and local investors who bought into the 3-tranch offer that spans between seven and 30 years.
According to the announcement, the Offer Book peaked at $12.2 billion which enabled the Nigerian Government to raise $1 billion more than the $3 billion it initially announced.
“After an intensive two (2) days of virtual meetings with investors across the globe, Nigeria has raised the sum of USD4 billion through Eurobonds.
“The Order Book peaked at USD12.2 billion which enabled the Federal Government of Nigeria (FGN) to raise USD1 billion more than the USD3 billion it initially announced,” the DMO said, describing the performance as exceptional.
It said the deal was one of the biggest financial trades to come out of Africa in 2021, adding that it represents “an excellent outcome”.
“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 nation’s debt managing agency added.
It said the Eurobonds were issued in three tranches as follows:
7 years -USD1.25 billion at 6.125% p.a
12 years -USD1.5 billion at 7.375% p.a
30 years -USD1.25 billion at 8.25% p.a
According to DMO, the long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023.
“Since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of USD4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act”, the DMO said.
It could be recalled that the DMO recently revealed that the Nigerian government through the agency planned to raise money through a $3bn Eurobond issuance from the International Capital Market, ICM.
Last week, the DMO in a statement by its spokesperson, Chinenye Onu, explained that all statutory approvals had been received and that the funds would be used to support the 2021 Appropriation Act and finance various projects.
The government agency added that a virtual meeting would be held with foreign and local investors on Friday, September 17 and Monday, September 20, to share more information about the Eurobond.
The last time Nigeria accessed the ICM was November 2018.
The DMO had earlier in the year announced that JP Morgan, Citigroup, Standard Chartered Bank and Goldman Sachs had been approved as international bookrunners/joint lead managers for the Eurobond offer.
Chapel Hill Denham was appointed as the Nigerian bookrunner; FSDH Merchant Bank as the financial adviser; White & Case LLP and Banwo & Ighodalo as the international and Nigerian legal advisers respectively.
Nigeria’s debt stock, before this deal, was N33 trillion.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
