Nigeria has successfully raised $2.25bn through a Eurobond issuance, demonstrating investor confidence in its economic outlook despite geopolitical tensions following threats from U.S. President Donald Trump of potential military action against the country.
According to bookrunner Chapel Hill Denham, the Eurobond proceeds will be used to finance the federal government’s fiscal deficit as part of efforts to strengthen budgetary support and maintain fiscal stability.
The dual-tranche issuance was split into 10-year and 20-year notes, priced at 9.125 per cent and 9.625 per cent, respectively.
Market analysts noted that the strong investor response underscores the resilience of Nigeria’s credit story, even amid global uncertainty and recent political developments.
According to Reuters news, the issuance came just days after President Trump warned that the United States could take military action against Nigeria if the government failed to stop attacks on Christians.
His comments briefly rattled financial markets, with Nigeria’s long-dated 2051 sovereign bonds falling by around 0.5 cents on the dollar before recovering some of the losses.
Despite the diplomatic strain, investor demand remained robust, reflecting continued appetite for African sovereign debt amid lower global interest rates and improved risk sentiment.
Traders believed the market largely dismissed the political rhetoric, focusing instead on Nigeria’s economic fundamentals and the attractive yields offered by emerging market assets.
Nigeria’s Eurobond sale aligns with a broader trend across Africa, as several countries return to international capital markets to take advantage of favourable borrowing conditions.
The Republic of Congo issued its first Eurobond in nearly two decades on Wednesday, while Kenya and Angola tapped the market earlier in the year.
Analysts say the successful issuance provides Nigeria with fiscal breathing space but also adds to its external debt burden, underscoring the need for prudent management of borrowed funds.
“This shows confidence in Nigeria’s ability to service its obligations, but it also calls for caution given the rising cost of debt,” a Lagos-based financial analyst, Mr Dele Kazim, said.
With this transaction, Nigeria joins a wave of emerging market sovereign issuers that have collectively pushed global debt sales to record highs this year, amid a growing search for yield by international investors
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