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Nigeria Plans First Eurobond Issue by June After Two-Year Hiatus - BLOOMBERG
By Emele Onu
Pedestrians walk between office buildings in the CBD of Lagos, Nigeria. Photographer: Benson Ibeabuchi/Bloomberg , Bloomberg
(Bloomberg) -- Nigeria hired investment banks including Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. to advise it on the West African nation’s first eurobond issue since 2022, according to people familiar with the deal.
The size of the eurobond offer, which is expected before June, has yet to be determined, said the people who asked not to be identified because they’re not authorized to comment publicly on the matter. Africa’s largest oil producer may raise as much as $1 billion in external borrowing this year to meet its spending needs, they said.
African debt sales are springing back to life as governments raise money after years of being priced out of international debt markets because of rising global interest rates. Benin, Ivory Coast and Kenya have successfully sold eurobonds this year.
Nigerian dollar bonds due in 2051 and 2028 were among the top 20 in an index of emerging- and frontier-market sovereign hard currency debt on Thursday. The yield on 2051 bonds fell four basis points to 10.43% and the rate on its 2028 debt dropped seven basis points to 9.46% by 11:16 a.m. in London.
President Bola Tinubu approved a 28.8 trillion naira ($18 billion) spending plan for 2024 and is targeting a budget deficit of 9.8 trillion naira, or 3.8% of gross domestic product, which will be financed by borrowings from domestic and international investors and multilateral lenders.
Read More: Nigeria May Look at Eurobond Toward End of 2024, Minister Says
Since coming into office in May, Tinubu has been seeking to attract foreign investors back into the economy with a raft of reforms. These include devaluing the naira twice as the country moves toward a more flexible exchange rate, reducing the gap between the central bank’s policy rate and yields on the short-dated paper it sells at auctions and removing costly fuel subsidies.
The government has also engaged Standard Chartered Bank and Lagos-based Chapel Hill Denham as advisers, according to the people. The nation’s debt management office didn’t respond to calls and requests for comments.
(Updates with Nigerian bond yields falling in fourth paragraph.)
