Abuja raises $1.25b Eurobonds, adds to N39.55 trillion debt
By Jeph Ajobaju, Chief Copy Editor
Abuja has raised another $1.25 billion through Eurobonds, six months after the $4 billion Eurobond auction proceeds in September 2021, and part of N150 billion bond issuance on the international capital market (ICM) planned for this year and beyond.
Nigeria is the first African country to raise up to $1.25 billion through Eurobonds on the ICM. It, however, adds to the national debt which rose to N39.55 trillion in December 2021, disclosed on Thursday by the Debt Management Office (DMO).
The DMO announced the same day that Nigerian investors contributed $60 million to the Eurobond subscription which will be used to boost external reserves and fund capital projects in the 2022 budget.
The DMO explained that the Eurobond is priced at a 7-year rate on the ICM and makes Nigeria the first African country to access the ICM in 2022.
“Nigeria’s ability to access the ICM at this time is a confirmation of her established presence in the ICM and engagement with investors on a continuous basis.
“The offer was launched at an initial price thoughts of 8.75% per annum and on the back of strong investor demand, Nigeria was able to revise the price guidance to 8.5% per annum. The order book continued to grow, reaching a peak of USD 4 billion,” the DMO said in a statement.
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Quality investors
The DMO said the subscribers included many quality investors in the United States, Europe, and Asia, according to Nairametrics.
“With this strong investor interest, the price was tightened to 8.375% per annum, and remained high at $ 2.676 billion, retaining its quality investors as Nigerian investors also participated in the offer with a total subscription of $60 million.
“The proceeds of the Eurobond will be used to finance critical capital projects in the budget to bridge the deficit in infrastructure and strengthen Nigeria’s economic recovery, equally important, it would contribute directly and in full to the level of Nigeria’s external reserves.”
