FG’s $1bn Eurobond over subscribed by 400%

Nigeria's Minister of Finance, Dr. Ngozi Okonjo-Iweala

The Federal Government yesterday announced that its $1 billion Eurobond has been over-subscribed by international investors to the tune of 400 per cent, exceeding the expectations of analysts.

According to the Federal Ministry of Finance, the positive response to the bond is anchored on a strong perception that the fundamentals of the Nigerian economy remain strong despite some recent challenges. “This positive reaction is an improvement on investor response to the first bond floated in January 2011.

It is especially significant coming at a time of increasing turbulence and uncertainty in the global market which has witnessed an exodus of investors from other emerging markets”, the Ministry said. Reacting to the development, the Coordinating Minister for the Economy and Minister of Finance, Dr. Mrs Ngozi Okonjo-Iweala, said: “This is very good news for the country.

It shows that the international investors are confident that the Nigerian economy is being well managed and that its future remains bright.” “Investors are not sentimental people. They vote with their pocket. So, if they are responding this way, then it is really significant.

At a challenging time for the global economy like this when investors are running away from other emerging markets, this is a source of encouragement and a vindication for the manner the economy has been managed by the administration of President Goodluck Jonathan”, she said. Maryam Khosrowshahi, who runs sovereign debt origination for Central and Eastern Europe in the Middle East and Africa at Deutsche Bank, in her own reaction said, “It was a bold move.

The transaction went extremely well, which demonstrates that there is still demand and liquidity.” Also reacting, the Director-General of the Debt management Office, Dr. Abraham Nwankwo described the bond as a testament to sound economic management and hard work by the Federal Government.

Meanwhile, yields on Nigeria’s $500 million Eurobonds due January 2021 rose 11 basis points, or 0.11 basis points to 6 percent Monday in London, where they are listed, though they declined 14 basis points to 5.86 per cent yesterday.
The Sun