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Investors Renewed Confidence In Nigeria’s Economy Leads to Oversubscribed Eurobond

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The Debt Management Office (DMO) revealed that the $3 billion Eurobond offer was heavily oversubscribed, noting that investors were ready to invest $12.2 billion.

Consequently, the government decided to increase its initial offer value from $3billion to $4billion.

According to a statement on Tuesday night by the Debt Management Office (DMO), investors from, Nigeria, Europe, Asia and America demanded $12.2 billion for the notes.

“This exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021 and an excellent outcome”, said the DMO in a statement.

“The size of the Order Book and the quality of investors demonstrate confidence in Nigeria”, the DMO said.

Nigeria opened its order book for the bond offering on Tuesday, aiming to issue the bond next week, according to a notice to investors.

The country issued the debt in tranches of three tenors.

It raised $1.25 billion for seven years at a yield of 6.125 percent and sold a 12-year bond at 7.375 percent to fetch $1.5 billion. A 30-year tranche of $1.25 billion was sold at 8.25 percent

The government had arranged a two-day call with investors last week and on Monday, with the DMO saying that the bond would be priced following the meetings.

The notice was set for Sept. 28 for the bond settlement, which will be listed on the London and Nigerian Stock Exchanges.

The Eurobonds are part of a government plan to raise 2.343 trillion naira ($5.71 billion) in external financing to help fund spending in 2021 and to partly finance the 5.6 trillion naira deficit.

“The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023”, the DMO said.

“Since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of USD4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act”, it added.

Nigeria picked JPMorgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners, and local firm Chapel Hill Denham on the forthcoming Eurobond issue

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African ESG Bond Issuance Surges to $4.4bn in 2024

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The landscape of sustainable investment in Africa is experiencing a significant upswing as the issuance of Environmental, Social, and Governance (ESG) bonds by African entities hit $4.4 billion in 2024.

This substantial increase highlights a growing commitment among African institutions to raise funds for investments aligned with ESG principles.

The surge in ESG bond issuance underscores a broader trend towards responsible and sustainable investing on the continent.

The African Development Bank (AfDB) emerges as a key player in this segment, having successfully issued social bonds worth $2 billion in January 2024, in addition to hybrid sustainable bonds amounting to $750 million.

Joining the AfDB in this endeavor is the Arab Bank for Economic Development in Africa (BADEA), which, with the support of the African Export-Import Bank, has issued bonds totaling €500 million.

This momentum in the ESG bond market has propelled financial institutions like BNP Paribas, JPMorgan, and Bank of America Securities into leading positions as arrangers for such bonds on the continent.

The surge in ESG bond issuance reflects a broader global trend towards sustainable finance, with the total value of emissions of this kind expected to reach $950 billion in 2024, according to Moody’s.

It is evident that ESG bonds are gaining traction in Africa, supported by development finance institutions and initiatives aimed at fostering sustainable economic growth and development across the continent.

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Coinbase Unveils $1 Billion Convertible Bond Plan to Fuel Growth

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Coinbase Global, Inc., the renowned cryptocurrency exchange platform, has announced its strategic move to bolster its financial position by initiating a private sale of $1 billion in convertible senior notes.

The bonds, set to mature in 2030, come with an additional provision allowing initial buyers to acquire an extra $150 million to address potential over-allotments.

This ambitious plan, aimed at fortifying Coinbase’s financial foundation, underscores the company’s commitment to fostering growth and expansion in the ever-evolving cryptocurrency landscape.

The proceeds from the convertible bond issuance are earmarked for “working capital and capital expenditures,” reflecting Coinbase’s strategic vision to drive innovation and enhance its market presence.

Convertible bonds offer a unique avenue for Coinbase to raise capital, providing investors with the flexibility to convert their holdings into company stock.

This approach not only diversifies Coinbase’s funding sources but also potentially reduces interest costs compared to traditional debt financing methods.

The decision to opt for convertible bonds aligns with Coinbase’s strategy to navigate market dynamics effectively while maximizing shareholder value.

Amidst recent operational challenges, including glitches during bitcoin’s price surges, Coinbase remains steadfast in its pursuit of growth opportunities.

Coinbase’s move to secure $1 billion through convertible bonds underscores its confidence in the long-term prospects of the cryptocurrency industry.

As the company continues to innovate and adapt to market trends, investors are poised to witness Coinbase’s strategic vision translate into sustained growth and value creation in the dynamic world of digital assets.

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Nigeria Taps Citibank, JPMorgan, Goldman Sachs for Eurobond Issue

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Nigeria has taken a significant step towards its first eurobond issue since 2022 by enlisting the expertise of top-tier investment banks, including Citibank NA, JPMorgan Chase & Co., and Goldman Sachs Group Inc.

Sources familiar with the matter disclosed that the eurobond offer, anticipated before June, is yet to have its size determined.

The decision to tap into international debt markets underscores Nigeria’s quest to secure external funding to meet its expenditure requirements amidst fiscal needs.

With Africa’s largest oil producer potentially eyeing up to $1 billion in external borrowing this year, the move aligns with President Bola Tinubu’s approved spending plan of 28.8 trillion naira ($18 billion) for 2024.

Amidst Nigeria’s ambitious fiscal targets, including a budget deficit of 9.8 trillion naira, equivalent to 3.8% of gross domestic product (GDP), external borrowings remain a vital component for financing infrastructure projects and stimulating economic growth.

The engagement of renowned investment banks reflects Nigeria’s efforts to instill confidence among foreign investors and attract capital inflows.

Since assuming office in May, President Bola Tinubu has spearheaded a series of reforms aimed at revitalizing the economy, including currency devaluation and subsidy removals.

In addition to Citibank, JPMorgan, and Goldman Sachs, Standard Chartered Bank and Lagos-based Chapel Hill Denham have been engaged as advisers by the Nigerian government.

This strategic move signals Nigeria’s determination to leverage global financial expertise in navigating its fiscal landscape and tapping into international capital markets to bolster economic development.

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