Nigeria comfortably raised $1 billion in its return to the Eurobond market on Thursday in what signifies a global investors’ endorsement of the Federal Government’s economic recovery initiatives and growth.
The issue was 750% oversubscribed, underscoring still buoyant investor appetite for scarce frontier African paper, despite a recent selloff in emerging market assets.
The Global medium term Note programme of $1 billion is due to mature in 2032.
It was a day of international acknowledgement and endorsement of the Debt Management Office continued effective strategy in a peculiar challenging local and global economic landscape, a statement by the government said late on Thursday.
The DMO was said to have defied all known predictions by international financial and capital market analysts to prove that Nigeria’s economy remains resilient and robust in the international capital market during the issuance of the nation’s first 15 years maturity $1 billion Eurobond.
Africa’s top oil producer issued the $1 billion 15-year bond at a 7.875 coupon at a most turbulent time of her economy.
These feet was said to have shown an unambiguous resilience of the Nigerian economy and strength, particularly in terms of effective bullish public debt management record.
Market players had queried that the Eurobond issuance will meet brick wall due mainly to the country’s Foreign Exchange policy, which has seen the Central Bank of Nigeria controlling the exchange regime.
Many stakeholders and international financial market analysts had premised at the Eurobond Roadshow in London, Los Angeles and New York that Government’s control of the Forex regime will adversely impact on the fortunes of the Eurobond.
This is the first time Nigeria is issuing a $1 billion Eurobond in a single tranche.
In 2013, the Federal Government issued a $1 billion Eurobond, but in two tranches of $500 million each for five and 10 years’ maturity each.
2011 was the debut outing of $500 million with maturity period of 10 years.
The Federal Government, it was said, will take advantage of this success to reflate an economy in recession and the otherwise turbulent market.
Egypt, with a higher credit rating, issued a 10-year Eurobond at 7.5 per cent compared to Nigeria’s 15-year at 7.875 per cent.
This was said to have shown Nigeria’s has a stronger performance in view of the longer maturity tenor.
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