Nigeria’s $2.35 billion Eurobond launched yesterday attracted more than $13 billion subscription, the country’s all-time high global subscription to an offer.
The Federal Government offered two tranches of 10-year and 20-year Eurobonds maturing in 2036 and 2046 to the international capital markets. The issue is made up of $1.25 billion 10-year Eurobond and $1.10 billion 20-year Eurobond.
The transaction attracted a peak orderbook of over $13 billion, marking the largest ever orderbook achieved by the country. A previous $2.2 billion Eurobond issued in 2024 had attracted about $9 billion subscriptions.
The overwhelming show of enthusiasm by the international capital markets for long-term investments in the country enabled the government to close the transactions at lower rates.
The Long 10-year bond and the Long 20-year Notes were priced at coupons of 8.6308 per cent and 9.1297 per cent respectively.
The $2.35 billion Eurobond attracted a wide range of investors from several jurisdictions including the United Kingdom, North America, Europe, Asia and Middle East, amidst strong enthusiasm by Nigerian investors.
The net proceeds from the Eurobond issuance would be used to finance the 2025 fiscal deficit and support the government’s other financing needs.
President Bola Ahmed Tinubu said the huge success recorded by the issue was an expression of continued investor confidence in the country’s sound macro-economic policy framework and prudent fiscal and monetary management.
He said: “We are delighted by the strong investor confidence demonstrated in our country and our reform agenda. This development reaffirms Nigeria’s position as a recognised and credible participant in the global capital market”.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said the record subscription was an indication of the global confidence in the country’s macroeconomic outlook.
“This successful market access demonstrates the international community’s continued confidence in Nigeria’s reform trajectory and our commitment to sustainable, inclusive growth,” Edun said.
Director General, Debt Management Office (DMO), Patience Oniha, said the issuance attracted demand from a combination of fund managers, insurance and pension funds, hedge funds, banks and other financial institutions, underlining the country’s strong support base across geography and investor class.
She said: “Nigeria’s ability to access the Eurobond Market to raise long term funding needed to support the growth agenda of President Tinubu is a major achievement for Nigeria and is consistent with the DMO’s objectives of supporting development and diversifying funding sources”.
She explained that the notes will 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.
Nigeria had 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.
Experts were unanimous yesterday that the huge success of the Eurobond was a decisive feedback on global perception of the Nigeria’s reforms and macroeconomic outlook.
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the record subscription level was indicative of the outlook for the economy.
He said: “It’s certainly a strong show of faith in the strength of the Nigerian economy for us to have this level of oversubscription”.
Managing Director, AIICO Capital, Dr Femi Ademola, said the oversubscription by 400 per cent was good sign of strong investor confidence in Nigeria.
Ademola, a Chartered Financial Analyst, noted that not only were the issues oversubscribed, the yield of 8.6308 per cent on the 10-year bond and 9.1297 per cent on the 20-year bond were the lowest since 2017.
“This is an indication of support for the government’s reform policies especially the foreign exchange liberalisation and increase in revenue generation. In my opinion, the strong interest in the Eurobond is due to the easier convertibility of the naira and the improved current and future revenue generation capacity of the country to repay such debts in the future. It would also suggest a strong support for the government’s efforts in bridging infrastructure gaps, improving self-sufficiency and lowering inflation.
“Due to the recent fiscal crisis in some petro-dollar economies and in some African countries which affected their capacity to repay due debts, it was expected that investors would be cautious and not be attracted to Eurobond issuances from Nigeria, arguably the reason while the country has not been active in the Eurobond market for over five years, this result is a vote of confidence in the country’s economic management and a confirmation that investors can separate politics from economics where necessary,” Ademola said.
Managing Director, GTI Capital, Mr Kehinde Hassan, said the success of the offer would positively impact the Nigerian domestic market.
According to him, the huge demand would further send positive signal to foreign direct and portfolio investors on the prospects of the Nigerian market.
Analysts at CardinalStone said the robust demand indicated that investors were confident in Nigeria’s macroeconomic narrative.
Analysts noted that credit rating upgrades from major agencies contributed to this confidence, reflecting a perceived decline in sovereign risk and a bolstering of the country’s credibility in the global debt market.
“This development bodes well for foreign exchange (forex) dynamics, particularly in supporting reserves accretion and naira appreciation. We project 2025 forex reserves to reach $45.0 billion by the end of the year. Importantly, the new Eurobond issuance does not alter our debt outlook for the year, as the planned borrowing was already factored into our projections. We expect a portion of the proceeds to be channelled towards refinancing maturing Eurobonds of $1.1 billion on 21st of November 2025 and bridging potential budgetary shortfalls,” CardinalStone stated.
