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DMO Secures $4bn For Nigeria Through Eurobonds

Ebuka Daniel

Nigeria has raised $4bn from the Euroband market after meeting with foreign investors, according to the Debt Management Office.

The result comes just less than one week after the Federal Government on September 16, announced plans for a Eurobond issuance in the International Capital Market (ICM) after its last issuance in November 2018.

The DMO revealed the result in a circular dated September 21 that the money raised from the issuance of the Eurobond will be part of the new external borrowing in the 2021 Appropriation Act.

The $4bn would be channeled to finance the projects in the 2021 Appropriation Act, said the debt office.

DMO said, “After an intensive two (2) days of virtual meetings with investors across the globe, Nigeria has raised the sum of USD4 billion through Eurobond.

“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 exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021, and ‘an excellent outcome’.

The debt manager said bids for the Eurobond were received from investors in Europe and America, as well as Asia.

DMO said local investors participated in the round, adding that the “size of the Order Book and the quality of investors demonstrate confidence in Nigeria.”

The Eurobonds were issued in three tranches of 7 years at $1.25bn at 6.125 per cent per annum.

The second tranche is 12 years of $1.5bn at 7.375 per cent per year and the 30 years bond of $1.25bn at 8.25 per cent per year.

DMO said the long tenors of the Eurobonds and the spread across different maturities are well aligned with its Strategy of 2020 to 2023.

Prior to the issuance, the DMO said the Eurobond would serve as an inflow of foreign exchange, leading to an increase in External Reserves.

DMO said, “External Reserves help support the Naira Exchange Rate, and Nigeria’s sovereign rating.

“When Nigeria raises funds externally, through Eurobonds, it frees up space in the domestic market for private sector and sub-national borrowers. In effect, it helps the sovereign not to crowd out other borrowers in the domestic market.

“The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector, notably banks, to issue Eurobonds to raise capital in the ICM.”

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