Business Nigeria Set To Return to International Bond Markets



The federal government is planning to go back on international bond markets two years after its last sale of debt, as Africa’s largest oil producer attempts to plug an $11bn budget deficit.

However, the cost for developing countries to borrow in dollars has surged since Nigeria last sought market financing, making any bond sale a key test of investor willingness to fund emerging markets, Financial Times reports.

Undeterred, Africa’s largest economy is finalising plans for an investor roadshow by the end of March, finance minister Kemi Adeosun told the Financial Times.

“We’re looking to test the eurobond market,” she said. “We think there’s appetite. We’re finalising plans for a non-deal roadshow in the first quarter.”

If successful, the ensuing bond sale will be the first issuance of external debt by Nigeria since July 2013, when it raised $500m of five-year bonds and $500m of 10-year bonds, at a yield of 5.38 per cent and 6.63 per cent respectively.

Prices for both bonds have since fallen, pushing the respective yields to 8.5 per cent and 6.81 per cent, as foreign investment into emerging market bonds and equities drop to the lowest levels since the financial crisis.

Ms Adeosun did not specify the size or maturity of the eurobond Nigeria hopes to sell after its initial roadshow but said the country’s possible return to international capital markets would be one of several ways it would borrow externally this year.

Last month President Muhammadu Buhari said Nigeria’s deficit would be funded partly by domestic bonds and partly from borrowing abroad.

Soource: Financial Times


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