Nigeria Secures $2.2bn in Eurobonds to Finance 2024 Budget Deficit

The Federal Government has successfully raised $2.2 billion in Eurobonds to fund the 2024 fiscal deficit and support the nation’s budgetary needs.

The Debt Management Office (DMO) confirmed the successful pricing of the bonds, which are maturing in 2031 (6.5 years) and 2034 (10 years), in an announcement on Monday, December 3, 2024.

The funds, comprising $700 million in 2031 bonds and $1.5 billion in 2034 bonds, were priced with a coupon of 9.625% for the 6.5-year notes and 10.375% for the 10-year notes.

The issuance saw robust demand from global investors, with the order book peaking at over $9 billion, reflecting strong support across diverse geographies and investor classes, including fund managers, pension funds, hedge funds, banks, and other financial institutions.

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Finance Minister and Coordinating Minister of the Economy, Olawale Edun, expressed confidence in the successful issuance, highlighting that it was a sign of growing international confidence in President Bola Ahmed Tinubu’s administration and Nigeria’s economic recovery efforts.

“This successful issuance signposts increasing confidence in the ongoing efforts of the Tinubu administration to stabilize the Nigerian economy and position it on the path of sustainable and inclusive growth for the benefit of all Nigerians,” Edun said.

The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, also commented on the issuance, emphasizing the growing confidence of investors in Nigeria’s creditworthiness.

He added that the success was a reflection of the country’s improving liquidity position and continued access to international markets.

Patience Ontha, Director-General of the DMO, called the issuance a landmark achievement. She highlighted the oversubscription of the offering, noting that the order book was approximately 4.18 times the original offer amount.

Ontha also expressed appreciation for the transparency and communication maintained throughout the process, thanking both international and Nigerian investors for their continued confidence.

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The funds raised will go toward financing the 2024 fiscal deficit and support the government’s budgetary needs, reinforcing the country’s efforts to address economic challenges while ensuring long-term growth.

The Eurobonds will be traded on the London Stock Exchange’s regulated market, the FMDQ Securities Exchange Limited, and the Nigerian Exchange Limited.

The DMO’s announcement noted that Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan, and Standard Chartered Bank served as joint book runners for the issuance, with FSDH Merchant Bank Limited acting as a financial adviser.