Nigeria to Sell $5.5bn of Eurobonds by Year-End

Nigeria plans to sell as much as $5.5 billion of Eurobonds in the next three months to fund capital projects and replace local-currency debt, according to the Debt Management Office. Yields on existing bonds rose.

That would bring the amount raised through Eurobond sales by Africa’s most-populous nation this year to more than $7 billion as President Muhammadu Buhari’s administration restructures its debt portfolio to almost double the portion of foreign borrowing in a bid to reduce financing costs.

The government wants to raise $2.5 billion in October to help fund 2017’s 7.4 trillion-naira ($20.8 billion) budget, the biggest yet, DMO Director-General Patience Oniha said on Wednesday in an interview in the capital, Abuja. It will sell the remaining $3 billion before the end of the year to replace naira-denominated debt, she said.

The government’s advisers “have told us the market is waiting,” Oniha said. “Work is already ongoing and we are just waiting for a resolution from the National Assembly to proceed.”

The yield on Nigeria’s $500 million of Eurobonds due July 2023 surged 15 basis points, the most since July 6, to 5.45 percent, while that on the February 2032 securities climbed 11 basis points to 6.85 percent by the close in London.

Citigroup Inc. and Standard Chartered Plc, which helped Nigeria sell bonds this year, will be retained as bookrunners for the $2.5 billion, and are in talks with the government to also lead the $3 billion sale, Oniha said.