Nigeria has launched the sale of $2.25 billion of Eurobonds as part of efforts to raise needed capital.
The debt instrument was facilitated by Chapel Hill Denham and will be used to cover the fiscal deficit contained in the 2025 budget.
The sale includes a dual tranche for 10 and 20 years at 9.125 per cent and 9.62 per cent, according to Chapel Hill Denham on Wednesday.
This development means Nigeria joins a host of African countries that have looked at the Eurobond markets in recent weeks. Others like Republic of Congo, Kenya, and Angola have also approached the market.
The President Bola Tinubu-led administration will be looking to capitalize on a drop in interest rates and robust demand from investors.
Last month, President Tinubu had asked lawmakers to approve a new international borrowing and authorise the issuance of a $500 million debut sovereign Sukuk.
Last week, the Senate and the House of Representatives approved President Tinubu’s request to borrow $2.85 billion from international debt markets.
Domestic Sukuk issuances have raised N1.39 trillion since 2017 to fund critical infrastructure projects such as major road construction.
He noted then that “the 2025 fiscal framework anticipates $9.27 billion in new borrowings to address the budget deficit, of which $1.84 billion is earmarked for external sources at an assumed exchange rate of N1,500 to the Dollar.”
He explained that the external borrowing 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 in November 2025.
Yesterday, President Tinubu requested the approval of the National Assembly for another N1.15 trillion borrowing from the domestic debt market to help finance the deficit in the 2025 budget.