Nigeria Eyes Sale of $500 Million Eurobond Before End of March

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Nigeria will probably tap the international bond market for a second time this quarter as the nation seeks to stimulate an economy facing its worst downturn in 25 years.

Vice President Yemi Osinbajo
Vice President Yemi Osinbajo

Vice President Yemi Osinbajo asked lawmakers this week to approve the sale of a $500 million Eurobond as part of the nation’s 2016 budget, according to a letter to parliament seen by Bloomberg.

“We wish to take advantage of favorable market conditions to issue a Eurobond” by the end of March, Osinbajo said in a letter to lawmakers, seeking prompt approval for the plan.

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According to the Bloomberg, Africa’s most populous nation issued a Eurobond this month for the first time in almost four years, raising $1 billion in a deal that was about eight-times oversubscribed. The economy shrank 1.5 percent in 2016 amid a slump in oil revenue and diminished foreign investment, according to International Monetary Fund estimates, the first full-year contraction since 1991. The statistics office will release the final figures next week.

The country is also eyeing another international bond sale as part of its plan to raise $3.5 billion of commercial and concessional debt for the 2017 budget, according to Ben Akabueze, the director-general of Nigeria’s budget office. Lawmakers will probably approve the 2017 spending plan by the end of March, Akabueze told reporters in the capital, Abuja.

“I can’t speak to the magnitude and timing,” Akabueze said separately in an interview.

The yield on Nigeria’s dollar bonds due 2032 fell six basis points to 7.3 percent by 1:35 p.m. in Abuja.

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