Nigeria’s $1 billion Eurobond oversubscribed by 700%Nigeria’s $1 billion Eurobond oversubscribed by 700%

Nigeria’s $1 billion Eurobond oversubscribed by 700%

In an overwhelming show of faith in Nigeria’s long-term prospects, foreign investors oversubscribed to the nation’s $1 billion Eurobond by a whopping 700 percent.

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Nigeria’s $1 billion Eurobond oversubscribed by 700%

In an overwhelming show of faith in Nigeria’s long-term prospects, foreign investors oversubscribed to the nation’s $1 billion Eurobond by a whopping 700 percent.

 

Investors ordered for almost $7.8 billion oversubscribing by 700 percent for the Eurobond issue. With an interest rate of 7.875 per cent, the bond will mature on February 16th, 2032 says the Federal Ministry of Finance on Thursday.

“The notes were approximately 8 times oversubscribed demonstrating strong market appetite for Nigeria. This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.” said the Federal Ministry of Finance.

 
“The notes were approximately 8 times oversubscribed demonstrating strong market appetite for Nigeria. This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.” – Federal Ministry of Finance

 
The Nigerian federal government plans to use the proceeds of the Eurobond to fund its budget deficit. The nation’s 2017 budget of N7.298 trillion has a fiscal deficit estimated to reach N2.36 trillion, up from N2.2 trillion last year.

Capital expenditure is anticipated to gulp N2.24 trillion (over 30 per cent of the budget) in 2017, up from N1.6 trillion last year.

According to the finance minister, Kemi Adeosun, “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.”

“At the heart of the agenda is a commitment to invest in developing Nigeria’s infrastructure through a target 30% annual budget commitment to capital expenditure.”

This is the first time Nigeria has raised funds from the international financial markets since July 2013. The inaugural issue was raised in 2011.

The Ministry of Finance says the notes will be admitted to the official list of the UK Listing Authority and will ready for trading on the London Stock Exchange’s regulated market.

 

“We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately” – Kemi Adeosun.

 

The ministry also said it would apply for the bond to be listed on Nigeria’s FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.

 

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