Nigeria plans to issue its first Eurobonds since 2022 and has enlisted the advice of investment firms like Citibank NA, Goldman Sachs, and JPMorgan Chase & Co, according to a Bloomberg article.
It is not yet known how big the auction will be that will take place before June.
The most populous country in Africa last used the international debt market to obtain $1.25 billion through a seven-year Eurobond in March 2022.
According to those familiar with the negotiations, Nigeria has also appointed Standard Chartered Bank and Chapel Hill Denham, located in Lagos, as consultants.
Nigeria has $1.2 billion in Eurobonds maturing next year, which will increase the country’s annual external obligation servicing budget of $1.0 billion.
Bloomberg previously stated that it anticipates Eurobonds to be issued by Nigeria, Angola, South Africa, and Gabon.
According to the most recent Firstbank Weekly Eurobond Commentary, “these countries have strong fundamentals or large outstanding debt in common.”
In a similar vein, it stated that the market consensus is that Nigeria will issue a new Eurobond during the second quarter.
It added that the yield chase has returned as risk-takers are drawn to Africa by bond frenzy.
“Recent debt sales in Africa show how investors are snapping up riskier bonds as the prospect of interest-rate cuts in the US takes benchmark yields off their peaks,” the report stated.
The oversubscription for this year’s Ivory Coast auctions, which demonstrated investor interest in the African Eurobond market, is a comparable example.
It claimed to have observed an increase in foreign players’ appetite for risk associated with Nigeria.
The head of the US Federal Reserve, Jay Powell, stated last Thursday that the bank will soon have the confidence to begin reducing borrowing costs.
The commentary said, “Our curves in Angola, Egypt, Ghana, and Nigeria have all opened positively off the back of those dovish remarks.”
Though the US inflation rate dropped from 3.1 percent in January to 3.2 percent in February, the Fed may decide not to lower interest rates.
