TLDR
- Nigeria has raised $2.2 billion in its latest Eurobond auction, the first since March 2022, to address its widening fiscal deficit.
- The offering included $700 million in 6.5-year bonds at 9.625% and $1.5 billion in 10-year bonds at 10.375%.
- While oversubscribed with $9 billion in total bids, only $2.2 billion was allocated.
Nigeria has raised $2.2 billion in its latest Eurobond auction, the first since March 2022, to address its widening fiscal deficit. The offering included $700 million in 6.5-year bonds at 9.625% and $1.5 billion in 10-year bonds at 10.375%. While oversubscribed with $9 billion in total bids, only $2.2 billion was allocated.
The bonds, issued under the Regulation S/144A structure, attracted investors from regions including the UK, North America, Europe, and Asia. Proceeds will fund Nigeria's 2024 budget, strained by declining oil revenues and rising public spending.
Analysts noted the high yields signal investor concerns about Nigeria's debt sustainability and economic outlook. Despite these challenges, officials view the strong demand as a vote of confidence in President Bola Tinubu's administration and its fiscal reforms.
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Key Takeaways
Nigeria's Eurobonds underscore a fiscal strategy amid economic pressures. With yields of 9.625% and 10.375%, the auction highlights investor caution regarding the country's debt burden. While oversubscription reflects global interest, the high-risk premiums signal doubts about Nigeria's economic resilience and creditworthiness. The funds aim to stabilize a budget undermined by oil disruptions and low diversification. However, rising borrowing costs could pose long-term challenges for debt sustainability.
