The $2.25 billion Eurobond issued by Nigeria saw a 470 per cent oversubscription, signaling deep investor confidence in the Nigerian economy.
The dual-tranche offering, designed to raise external capital and diversify the nation’s funding sources, attracted over $13 billion, resulting in an oversubscription rate exceeding four times the initial raise, allowing the Debt Management Office (DMO) to successfully price both the 10-year and 20-year tranches.
The 10-year tranche expiring in 2036 saw seven times the demand, leading to an oversubscription of $7 billion (for an issued amount of $700 million), while the 20-year tranche maturing in 2046 saw its demand exceed $5 billion (for an issued amount of $1.5 billion).
The debt instrument was facilitated by Chapel Hill Denham and will be used to cover the fiscal deficit contained in the 2025 budget.
The oversubscription further eases jitters stemming from US political involvement in Nigeria, specifically the implied military action threat by President Donald Trump over the killings of Christians by Islamist militants in the country.
Prior to this, the Eurobond secondary market experiencing huge selloffs on Monday and Tuesday.
However, the oversubscription indicates that investors took advantage of drop in interest rates and falling inflation as signs of strength for the Nigerian economy.
President Bola Tinubu plans to block fiscal deficits via domestic and external borrowings, some of the latter he said would be sourced through various instruments, including Eurobonds, syndicated loans, bridge financing, or direct loans from multilateral institutions — in order to optimise cost and manage risk effectively.
A key element of the plan is the refinancing of Nigeria’s $1.118 billion Eurobond, issued in 2018 at a coupon rate of 7.625 per cent and due this month.
Market analysts note that fiscal reforms and credit rating improvements under President Bola Tinubu will further back faith in the Nigerian economy.