Nigeria Plans $1.7 Billion Eurobond Issue to Help Finance 2025 Budget

The Federal Government of Nigeria is planning to issue $1.7 billion in Eurobond to help finance its 2025 budget. This is in addition to $500 million worth of Islamic sukuk bonds.

This was revealed by the country’s Finance Minister Wale Edun at a briefing in Abuja, the nation’s capital on Thursday. He also revealed authorities are working to submit the borrowing plan to lawmakers this year and expect approval “as soon as possible,”.

This latest issuance of Eurobond is coming after the government had earlier issued a $500 million bond on the local market in August.

Earlier $500 million Eurobond

As part of efforts to stabilise the naira by attracting dollars held by Nigerians abroad, as well as international investors, The federal government in August announced the issuance of a $500 million Eurobond.

The bond was issued locally but denominated in U.S. dollars, the ministry however gave no details of the bond’s duration and when the sale will close.

The Nigerian Government raised $900 million this domestic sale of dollar-denominated bonds, almost double the targeted amount, as local investors clamored for the high-yielding securities to hedge against currency devaluation.

Reasons For High Subscription

Investors were attracted to the local dollar bond due to its offer of very high returns and ability to serve as a hedge against foreign-exchange devaluation While  there is also investor confidence that the country is not in any risk of economic default.

The volatile exchange rate the country is facing has prompted residents to seek hedging instruments against the volatility of the exchange rate such as the domestic dollar bond.

 

 

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