Deficit Financing: Nigeria Raises $4 Billion Through Eurobonds

By Uche Mbah

The Debt Management Office Tuesday said the Federal government has successfully raised over $4 billion to help finance the N5.6 trillion deficit budgeting accumulated over time through Eurobond.

Surprisingly, the bond was oversubscribed as investors were angling to pump in $12.2 billion as against the $3 billion offer.

The Government had to increase the offer by an extra $1 billion.

“This exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021 and an excellent outcome,” the DMO said, equating the size of the order and quality of investors to the level of confidence in the Nigerian economy.

But analysts believe it may rather be a factor of shrewd investment resulting from panic as the global financial system wobbles, and commodities gradually replace fiat currency.

The bonds were in seven-year, 12-, year and 30-year tenor.

The debt management office raised $1.25 billion for seven years at a yield of 6.125%; $1.5 billion from the 12-year bond at 7.375% and $1.25 billion was sold or the 30-year tenor at 8.25%.

The bond will be listed on the Nigerian Stock Market.

The settlement would take place on September 28 for the bond which would be listed on the London and Nigerian Stock Exchanges.