FG rakes in $9.5b from oversubscribed bond

Nigeria’s fund drive for project finance received a major boost on Wednesday as the country’s $2.86 billion Eurobond offering to international investors was over subscribed by 327 percent. The over subscribed figure stands at $9.5 billion.

Zainab Ahmed, the minister of finance noted that the fund raising was approved by the Nigerian Senate last month to partly finance the 2018 budget.

Nigeria had recently offered eurobonds worth $2.86 billion to investors at an investment roadshow in London which attracted some of the leading global instittuonal investors.

A breakdown of the eurobond offering shows that among the triple tranche bonds of $1.18 seven-year series, $1bn 12-year series and a $750m 30-year series, a greater percentage of subscriptions were skewed to the seven year series, according to analysts at Zedcrest Capital.

The 7-year series bears an interest rate of 7.625 percent, the 12-year series has its interest at 8.75 percent, while the 30-year series carries an interest rate of 9.25 percent.

“The Eurobond over subscription is owed largely to Nigeria’s successful engagement with the Fitch Rating Agency. The agency had changed the outlook on Nigeria’s sovereign rating from B+ (negative) to B+ (stable), based on improving macro-economic fundamentals,” Ahmed said.

The eurobond issued under the Federal Government’s global medium term note programme represents Nigeria’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017, and one in early 2018 and its first triple-tranche offering.

A statement from Ahmed’s office further noted that the offering has attracted significant interest from leading global institutional investors with the over subscription demonstrating the on-going confidence of international capital market investors in the Nigerian economy.

It said despite significant oil and macroeconomic volatility, Nigeria had successfully raised its external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across Sub-Sahara Africa.