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DMO terms a “peak order book” of more than US$11.5bn.

Return to the Eurobond market in good time


The FGN has returned to the Eurobond market for the second time since February 2017, and attracted what the DMO terms a “peak order book” of more than US$11.5bn. In another successful issue, it has priced its offering of US$2.5bn, divided equally between 12- and 20-year debt instruments, at rates of 7.143% and 7.696% respectively. The FGN, like its Egyptian counterpart, moved quickly last week to tap the market in case sentiment moves against EM issuers as a result of the current normalisation of US monetary policy.


  • Nigeria’s borrowings on international capital markets at end-September amounted to US$3.3bn, equivalent to 21.5% of the FGN’s external debt stock. That ratio now stands close to 50%. The balance consists of bilateral and multilateral loans, the largest creditor being the World Bank Group.

  • The borrowing costs are still much lower than on naira issuance. We earlier estimated the average interest rate on the FGN’s domestic debt in 2017 at 15.5%. That average has since fallen by about 200bps.

  • The latest issue will be utilized to refinance domestic debt, suggesting further yield compression on FGN naira paper.

  • The DMO’s medium-term strategy has a 60/40 target for the domestic/external blend of FGN debt plus states’ domestic borrowings. The actual split in September (before the two latest Eurobond issues) was 77/23.
  • Nigerian central bank injects US$210m into currency market: The CBN said on Monday it had injected US$210m into the interbank foreign exchange market, extending efforts to boost liquidity and alleviate dollar shortages. (Source: Reuters)

    FG requires N73bn investment to offtake 2,000MW stranded power: The federal government has stated that N73bn (US$203m) will be required to install a number of 33/11/0.415 kilovolts (kV) electricity distribution facilities in the 11 distribution networks to enable them take up the 2,000MW of power currently stranded with the generation companies. (Source: Thisday)

    SIPP, Chinese firm sign US$550m EPC contract for 400MW plant: Sagamu Independent Power Plant Limited (SIPP) has signed an Engineering, Procurement and Construction (EPC) contract with China Energy Engineering Corporation Limited for the construction of 400MW Sagamu IPP to be located in Sagamu Local Government Area of Ogun State. (Source: Thisday)

    Kachikwu – FG to sanction more projects in absence of PIB: The minister of state for petroleum resources, Ibe Kachikwu, has said that despite the non-passage of the remaining components of the Petroleum Industry Bill (PIB), the federal government (FG) will continue to drive the practicable aspects of oil and gas policies to purse investments that will keep the industry going. (Source: Thisday)

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