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Nigeria returns to int’l capital market, issues two Eurobonds to plug 2024 budget deficit
In a bid to plug Nigeria’s 2024 budget deficit, Nigeria is set to issue two significant Eurobond offerings.
This is Nigeria’s return to the international capital markets for the first time in over two years.
The government is issuing $500 million in 6.5-year bonds, alongside a benchmark-size offering of 10-year bonds, with yields expected in the 10.125% area for the shorter-dated securities and 10.625% for the longer maturities.
This marks the country’s first Eurobond issuance since March 2022. The bonds will be issued in U.S. dollars, with semi-annual coupons, and are structured in 144A/Reg S format, making them accessible to both U.S. and international investors.
Nigeria’s last outing in the international capital market was in March 2022, when the country raised $1.25 billion at a rate of 8.375 percent through a seven-year Eurobond.
READ ALSO: Nigerian govt repays $500bn Eurobond in July, $1.8bn in last five years
The bonds will be listed on the London Stock Exchange’s Main Market, and the transaction is set to settle on December 9, 2024. Denominations will start at $200,000, with multiples of $1,000 thereafter.
The proceeds from this issuance will be used to support the Nigerian government’s efforts to bridge the fiscal deficit, which has been widening due to a combination of disruptions in crude oil production, low tax revenue, and insufficient economic diversification.
The Eurobond sale is managed by a consortium of international and domestic financial institutions, including Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., and Standard Chartered Plc, with Chapel Hill Denham Advisory Limited acting as the Nigerian bookrunner.
By: Babajide Okeowo
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