FG issues $500m Eurobonds to finance budget deficit

The federal government has announced the launch of Eurobonds worth $500 million under its Global Medium Term Note Programme to finance the 2024 budget deficit.

The federal government intends to issue the Eurobonds in two tranches. The first is a six-and-a-half-year bond with a coupon rate of 10.125 per cent, while the second tranche is a 10-year bond with a coupon rate of 10.625 per cent.

The bonds are expected to settle on December 9, 2024.

This is the first time the government will issue Eurobonds in two years. The last time was in 2022, when it raised $1.25 billion at a rate of 8.375 per cent through a seven-year Eurobond.

The proceeds from the Eurobond will be used to finance infrastructural projects and aid in economic development.

This announcement is coming less than a week after the minister of finance announced the federal government’s plan to issue a $1.7 billion Eurobond to strengthen Nigeria’s finances and improve the country’s economic reforms.

The minister had told journalists after the Federal Executive Council (FEC) meeting at the Presidential Villa in Aso Rock on Thursday that the federal government was working towards completing its external borrowing program.

“The first objective is to complete the federal government’s external borrowing program with the approval of the $2.2 billion financing package, which will include access to the international capital market through a combination of Eurobonds and Sukuk bonds—approximately $1.7 billion from the Eurobond offer and $500 million from Sukuk financing,” said the minister.