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Nigeria is planning to sell $2.3 billion in eurobonds as soon as this week, testing investor appetite for the debt days after US President Donald Trump threatened military action against Islamist militants in the country and sparked a selloff.
The government is moving ahead with plans to sell 10-year debt as well as 15- or 30-year securities, pending sign-off on the legal documents from the justice ministry, Bloomberg reported citing, people with knowledge of the matter.
Nigeria joins Kenya and Angola in raising foreign-currency debt from Africa this year, as resilient global growth and expectations of more interest-rate cuts from the US dialed up investor appetite for riskier assets globally, including high-yield sovereign bonds.
The average spread for African sovereign debt over US Treasuries has dropped by nearly half since April to 367 basis points, according to JPMorgan Chase & Co. indexes.
The Nigeria eurobonds sale would be the first since the country raised $2.2 billion in December.
The proposed sale was briefly delayed, according to one of the people, after Trump threatened US military action against Islamist militants in the country for what he claimed was the Nigerian government’s failure to prevent systematic killings of Christians. Trump also threatened to cut off US aid.
Nigerian President Bola Tinubu rejected Trump’s characterizations in a post on social media platform X, saying that Nigeria has “constitutional guarantees to protect citizens of all faiths.”
Nigerian investment bank Chapel Hill Denham, JPMorgan Chase & Co., Standard Chartered Plc, Citigroup Inc. and Goldman Sachs Group Inc. are joint lead managers to the bond sale, while FSDH Merchant Bank Ltd. is financial adviser to the government, the people said.
Nigerian lawmakers last month approved a plan to raise $2.3 billion in foreign debt by the end of the year, along with $500 million in sukuk Islamic notes. Nigeria has a $1.12 billion eurobond maturing on Nov. 21.
The price of Nigeria’s longest-dated debt, due in 2051, has dropped by about a cent to 91.05 cents over the past two days, driving the yield up to 9.14%. That’s down from a peak of 12.11% in April.
Nigeria’s naira and eurobonds rebounded after an initial selloff in Monday’s trading following the Trump military threat.
“The FX market seems to be stabilising after the initial widening of bid-offer spreads. So the overall market reaction is broadly contained,” Samir Gadio, Head of Africa Strategy, FX, Rates and Credit Research, at Standard Chartered Bank, told MoneyCentral.
“Nigeria Eurobond prices fell slightly at open (around -0.5pt), but the dip seems contained and has partly reversed since. In spot, USD-NGN quotes were very wide at open (1425/75), but the range has tightened since (more like 1430/1450 now),” Gadio said.
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