Nigeria Pays Price for First Eurobond Since Start of Ukraine War

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Nigeria raised $1.25 billion in foreign debt to become one of the first sovereigns to tap the Eurobond market since Russia’s invasion of Ukraine, but the funding came at a cost.

The seven-year bond was priced at 8.375 percent, which was less than the initial guidance but a premium of about 55 basis points over debt due a year ago, which yielded 7.8 percent on Friday. Those bonds, which have a seven-year maturity and a coupon of 6.125 percent, were issued just six months ago.

According to Patience Oniha, director-general of the Debt Management Office, the issuance was part of the government’s plan to borrow $6.1 billion overseas in 2021 to plug its fiscal deficit. It raised $4 billion last year but postponed the remainder.

The Ukraine conflict and Federal Reserve policy tightening had made market conditions “difficult,” said Lanre Buluro, managing director for capital markets at Lagos-based Chapel Hill Denham, joint bookrunner for the sale, over the phone. “It is commendable that you were able to raise capital in the Eurobond market during these difficult times.”

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