By Emele Onu/Bloomberg
Nigeria, which had hoped to issue a Eurobond this year, has decided to delay it and sell a debut dollar bond on the domestic market as it seeks to fund its budget deficit and shore up the battered naira.
On Thursday, Finance Minister Wale Edun told an investor conference in Lagos, the commercial capital, that the five-year, $500 million bond will be issued on Aug. 19.
He said market conditions had not been ripe to proceed with the Eurobond, so the government will instead target Nigerians at home as well as the significant number who live abroad.
“Interest rates are coming down, but they are still elevated, and our access to those markets is very strongly affected by the way the rating agencies rate developing countries,” Edun said. “The only answer to that is relying on your recourses to raise domestic funds.”
African nations were priced out of international capital markets after global interest rates rose sharply in 2022 in response to mounting inflation. Still, several have returned this year, including Ivory Coast, Benin, Senegal, Kenya and Cameroon.
Nigeria’s issue will be priced at a yield similar to its 2029 Eurobonds, said Gbadebo Adenrele, managing director for investment banking at lead arranger United Capital Plc. The 2029s were quoted at 10.23% at 3:25 p.m. in London.
