Eurobond oversubscribed by 400% despite geopolitical tensions - DMO

Nigeria’s latest Eurobond issuance has attracted overwhelming investor demand, with subscriptions surpassing $9.1 billion more than four times the $2.25 billion offered despite global market unease triggered by U.S. political developments.

According to the Debt Management Office (DMO), the dual-tranche offering, aimed at raising external capital and diversifying Nigeria’s funding sources, was heavily oversubscribed across both the 10-year and 20-year notes.

The 10-year tranche, with a target of $700 million, drew an impressive $4.9 billion in bids an oversubscription of seven times while the 20-year tranche attracted $4.2 billion for an issuance size of $1.5 billion.

The strong investor appetite came amid heightened geopolitical tension following U.S. President Donald Trump’s implied threat of military action against Nigeria if the government failed to curb attacks on Christians by Islamist militants. 

The statement had earlier caused selloffs in the Eurobond secondary market on Monday and Tuesday.

Despite these jitters, analysts said Nigeria’s fiscal reforms and improving credit ratings buoyed investor confidence.

“I sense that it will do well, regardless of the issues,” said AbdulRauf Bello, a portfolio manager at Cowrywise. 

“The ongoing fiscal reforms and credit rating improvements will support our outlook. Also, I am seeing some 9–10 percent interest rate. Those yields are super attractive especially when you contextualise them with recent Fed rate cuts.”

The DMO priced the 10-year notes to yield 8.75 percent and the 20-year notes at 9.25 percent, with maturities set for January 2036 and January 2046 respectively.