Tuesday, 03 December 2024 04:54

FG raises fresh $2.2bn loan via eurobond - DMO

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The Debt Management Office (DMO) says Nigeria has raised $2.2 billion in the international capital market through its latest eurobond auction.

The development comes two years after the federal government issued its last eurobond.

In November, Wale Edun, minister of finance and coordinating minister of the economy, said approximately $1.7 billion is expected from a eurobond offer and $500 million from a sukuk financing to strengthen the country’s finances and support economic reforms.

The sum is expected to be used to finance the N9.1 trillion deficit in the 2024 budget

In a statement on Monday, DMO said it auctioned two bonds including a 6.5 year eurobond which is expected to mature in 2031 and a 10-year eurobond in 2034, respectively, in the international capital markets on December 2.

According to the statement, although Nigeria priced the eurobond at $2.2 billion, the bonds recorded a peak orderbook of more than $9 billion.

“The Federal Republic of Nigeria (the “Republic”) successfully priced US$2.2 billion in Eurobonds (the “Notes”) maturing in 2031 (6.5-year) and 2034 (10- year) in the international capital markets on 2 December 2024, with US$700 million and US$1.5 billion placed in the 2031 and 2034 maturities, respectively,” the statement reads.

“The 6.5-year and the 10- year. The Notes were priced at a Coupon and Re-offer Yield of 9.625 per cent and 10.375 per cent, respectively.

“Nigeria is pleased to have attracted a wide range of investors from multiple jurisdictions including the United Kingdom, North America, Europe, Asia, Middle East and participation from Nigerian investors, which it views as an expression of continued investor confidence in the country’s sound macro-economic policy framework and prudent fiscal and monetary management.”

DMO said the transaction attracted “a peak orderbook of more than $9 billion,” underscoring the strong support for the transaction across geography and investor class.

Regarding investor class, the agency said demand came from a combination of fund managers, insurance and pension funds, hedge funds, banks and other financial institutions.

DMO said the notes would be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market, the FMDQ Securities Exchange Limited, and the Nigerian Exchange Limited.

“The proceeds from this Eurobond issuance will be used to finance the 2024 fiscal deficit and support the government’s budgetary needs,” DMO said.

“Nigeria mandated Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan and Standard Chartered Bank as Joint Bookrunners. FSDH Merchant Bank Limited acted as Financial Adviser on the issuance.”

 

The Cable

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