Nigeria to issue first Eurobond after two years

Nigeria is expected to issue its first Eurobonds since 2022 and has hired investment banks such as Citibank NA, Goldman Sachs, JPMorgan Chase & Co to advise on it, a report by Bloomberg has shown.

The size of the auction to be carried out before June is yet to be determined.

The last time Africa’s most populous nation tapped the international debt market was in March 2022, when it raised $1.25 billion through a seven-year Eurobonds.

The report said that according to sources close to the deal, Nigeria has also hired Standard Chartered Bank and Lagos-based Chapel Hill Denham as advisers.

Nigeria has a Eurobonds maturity due next year amounting to $1.2 billion, which would add to over $1.0 billion typically used to service external obligations annually.

Bloomberg had earlier reported that it expects Nigeria, Angola, South Africa and Gabon to issue Eurobonds.

“What these countries have in common is either large outstanding debt or strong fundamentals,” the recent Firstbank Weekly Eurobond Commentary noted.

Similarly it said that sentiment around the market is that Nigeria is set to issue a new Eurobond in the second quarter.

It said that yield hunt is back as bond spree lures risk takers to Africa.

“Recent debt sales in Africa show how investors are snapping up riskier bonds as the prospect of interest-rate cuts in the US takes benchmark yields off their peaks,” the commentary noted.

A similar case is the oversubscription for the Ivory Coast auctions this year that reflected investor appetite for the African Eurobond market.

It said that it’s seen a growing appetite for Nigeria risk from international players.

Jay Powell, the US Federal Reserve chair, said last Thursday that the US central bank is not far from having the confidence to start lowering borrowing costs.

“Our Angola, Egypt, Ghana, and Nigeria curves have all opened positively off the back of those dovish remarks,” the commentary read.

However the recent US inflation report at 3.2 percent in February from 3.1 percent in January might withhold the Fed’s stance on cutting rates.

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