Nigeria Heads to London, U.S. as It Markets Longest Eurobond Yet

minister-of-finance-kemi-adeosunMinister for Finance, Kemi Adeosun
  • Nigeria Heads to London, U.S. as It Markets Longest Eurobond Yet

Nigeria will meet investors this week for its first Eurobond sale in more than three years as Africa’s most populous nation battles an economic contraction and the worst dollar squeeze since 2007.

Beginning Friday, officials will hold roadshows in London and the U.S. before the proposed issue of a 15-year bond, the country’s longest-maturity dollar debt yet, according to a person familiar with the matter, who is not authorized to speak publicly. Finance Minister Kemi Adeosun and the central bank’s Deputy Governor Sarah Alade will lead the meetings, to be organized by Citigroup Inc. and Standard Chartered Plc.

The issue proceeds as well as a $1 billion loan Nigeria plans to seek from the World Bank will be used to fill the government’s funding gap arising from lower oil-export revenue. President Muhammadu Buhari’s government is proposing a record budget this year to lift its economy out of the worst slump in more than two decades amid foreign-currency and fuel shortages.

The dates for the roadshow are:

  • London: Feb. 3
  • Los Angeles: Feb. 6
  • Boston: Feb. 7
  • New York: Feb. 8

Nigeria has $1.5 billion of Eurobonds outstanding, all of which were sold with maturities of five or 10 years. The yield on Nigeria’s $500 million bond due in July 2023 rose for a seventh day, by two basis points, to 6.92 percent as of 11:11 a.m. in Lagos, the commercial capital.

Nigeria also plans to apply for the World Bank loan once lawmakers approve this year’s budget, Adeosun told reporters Feb. 1. The government forecasts thefiscal deficit to be 2.36 trillion naira ($7.5 billion) in 2017, Adeosun said.

The oil-dependent economy is suffering its worst downturn in more than two decades thanks to falling revenue from crude exports and investors fleeing amid the imposition of capital controls. Gross domestic product probably shrank 1.5 percent in 2016, according to the International Monetary Fund.

In 2016, capital inflows fell 47 percent to $5.1 billion, the lowest since 2007, according to the National Bureau of Statistics. Portfolio investment declined by 70 percent and foreign direct investment shrank 28 percent, while the stock market lost more than $20 billion in value in the world’s worst performance.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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