Nigeria Raises $2.86bn Eurobond For 2018 Budget Deficit, Others
BY COBHAM NSA, ABUJA – The Federal Government said US $2.86 billion Eurobond has been raised under its Global Medium Term Note Programme to fund the 2018 budget deficit and other financing needs
Announcing the transaction outcome in Abuja on Wednesday night, Special Adviser on Media and Communications to the Minister of Finance, Mr Paul Ella Abechi, said in the statement that the offer was again oversubscribed by about $9.5 billion to demonstrate a strong global investors’ appetite for the Nigerian instrument.
“The offering has attracted significant interest from leading global institutional investors with a peak combined order book of over $9.5 billion, which reflects an over-subscription of more than three times and demonstrates the on-going confidence of international capital market investors in external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across Sub-Sahara Africa”, Ella Abechi said
According to him, “The successful transaction follows closely behind Nigeria’s successful engagement with the Fitch rating agency, and their subsequent decision to change the outlook on Nigeria’s sovereign rating from B+ (negative) to B+ (stable), based on improving macro-economic fundamentals.”
The statement said; “The notes comprise a $1.18 billion 7-year series, $1 billion 12-year series and a $750 million 30-year series. The 7-year series will bear interest at a rate of 7.625 per cent, while the 12-year series will bear interest at a rate of 8.75 per cent, and the 30-year series will bear interest at a rate of 9.25 per cent. In each case, they will be repayable with a bullet repayment of the principal on maturity.”
“When issued, 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 Republic may apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.
“The pricing was determined following a series of meetings with investors in London and conference calls with investors globally attended by the Nigerian delegation, which comprised Honourable Minister of Finance, Zainab Shamsuna Ahmed, the Honourable Minister of Budget and National Planning, Senator Udoma Udo Udoma, Central Bank Governor, Godwin Emefiele, Director General of the Debt Management Office (DMO), Patience Oniha, and Director General of the Budget Office of the Federation, Ben Akabueze. The Joint Lead Managers for the issuance were Citibank Global Markets Limited and Standard Chartered Bank and the financial advisors were FSDH Merchant Bank Limited”, the statement added.
It further explained that the offering will close on or about November 21, 2018, subject to the satisfaction of various customary closing conditions, stressing that despite significant oil and wider macro market volatility, Nigeria still “successfully raised its external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across Sub-Sahara Africa.”
“The Republic intends to use the proceeds of the Notes towards funding of the fiscal deficit and other financing needs. The Notes represent the Republic’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.
“When issued, 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”, Ella said
