Nigeria’s $2.25bn Eurobond Oversubscribed Amid Strong Investor Confidence
Nigeria has successfully returned to the international capital market with a $2.25 billion Eurobond issuance, drawing overwhelming investor demand despite recent geopolitical tensions. The dual-tranche offering, consisting of 10-year and 20-year notes, was oversubscribed more than four times, with global investors placing orders exceeding $9.1 billion. The sale demonstrates renewed confidence in Africa’s largest economy, even amid warnings from US President Donald Trump about potential military intervention over alleged domestic conflicts.
The Federal Government initially aimed to raise $700 million from the 10-year tranche and $1.5 billion from the 20-year tranche. Investor appetite far exceeded expectations, with the 10-year notes receiving bids worth about $4.9 billion and the 20-year notes attracting $4.2 billion. The Debt Management Office reported that this strong demand allowed the bonds to be priced at lower yields than initially projected, with the 10-year notes set at 8.75% and the 20-year notes at 9.25%, compared with earlier guidance of 9.125% and 9.625%.
Proceeds from the Eurobond will finance Nigeria’s budget deficit and refinance a $1.1 billion maturing Eurobond later this month. The sale came shortly after Trump’s comments briefly rattled long-term sovereign bonds, with the 2051 issue dipping slightly before recovering. Analysts say the successful issuance reflects investors’ focus on Nigeria’s high-yield opportunities and improving fiscal trajectory rather than short-term political noise.
Nigeria’s return to the Eurobond market aligns with a broader resurgence of African sovereign debt issuance. This week, the Republic of Congo issued its first Eurobond in nearly two decades, while Kenya and Angola also made notable returns last month. According to JPMorgan Chase & Co., the average spread for African sovereign debt over US Treasuries has dropped to around 379 basis points, nearly half its level from April, highlighting renewed global investor confidence in the region.
The issuance, the first since December 2024, represents a strategic move by the Nigerian government to rebalance its debt portfolio, strengthen foreign exchange reserves, and attract portfolio inflows amid domestic liquidity constraints. The oversubscription underscores investor faith in Nigeria’s economic reforms and ability to meet obligations, with the 10-year Eurobond maturing in January 2036 and the 20-year tranche due in January 2046.
source: punch