Eurobond: Nigeria plans $2.3 billion sale amid Trump’s threat

Nigeria is set to return to the international debt market this week with a planned $2.3 billion eurobond issuance, even as global investors weigh risks following U.S. President Donald Trump’s recent threat of military action against Islamist militants in the country.

According to a Bloomberg report citing people familiar with the matter, the federal government plans to issue 10-year notes alongside 15- or 30-year securities, pending final approval from the Ministry of Justice.

The move signals Nigeria’s confidence in global investor appetite for emerging-market debt despite recent political jitters.

Tapping from international bond market 

Nigeria joins Kenya and Angola in tapping the international bond market this year, taking advantage of steady global growth and expectations of U.S. interest rate cuts, which have boosted demand for high-yield assets.

• The average spread on African sovereign debt over U.S. Treasuries has narrowed significantly to 367 basis points, nearly half its level in April, according to JPMorgan Chase & Co. indexes.
• If completed, the eurobond sale will be Nigeria’s first international debt issuance since December 2024, when it raised $2.2 billion.
• The latest offer was briefly delayed following Trump’s remarks accusing the Nigerian government of failing to protect Christians and threatening to cut off U.S. aid. The comments triggered a temporary selloff in Nigerian assets.
• President Bola Tinubu swiftly rejected Trump’s claims, insisting on social media platform X that Nigeria “has constitutional guarantees to protect citizens of all faiths.” 

The Eurobond managers 

Investment banks Chapel Hill Denham, JPMorgan Chase & Co., Standard Chartered Plc, Citigroup Inc., and Goldman Sachs Group Inc. have been appointed as joint lead managers, while FSDH Merchant Bank Ltd. is acting as financial adviser. A Chapel Hill Denham representative confirmed their participation, while Citigroup declined to comment.

Nigeria’s National Assembly recently approved plans to raise $2.3 billion in foreign debt by the end of the year, in addition to $500 million in sukuk Islamic bonds.

Globally, emerging-market governments have already raised over $245 billion in dollar- and euro-denominated debt this year — the highest on record since at least 2014, according to Bloomberg data.

Nigeria’s 2051 eurobond has dropped by about a cent to 91.05 cents in the past two days, pushing yields up to 9.14%, still well below the 12.11% peak seen in April.

What you should know 

Since taking office in May 2023, President Tinubu has implemented market-friendly reforms, including the removal of fuel subsidies, a revamp of the tax system, and a more flexible naira exchange rate, which have earned praise from investors and credit-rating agencies.

These reforms prompted Moody’s Ratings to upgrade Nigeria’s sovereign credit rating from Caa1 to B3, citing “significant improvements in the country’s external balance and fiscal position.”  

The agency noted that Nigeria is now on the verge of re-entering the pool of emerging markets considered investable by major institutional debt investors.

• Meanwhile, Nigeria is preparing to meet two major debt obligations before the end of 2025, comprising the $1.12 billion Eurobond and a N100 billion Sukuk bond, both of which represent crucial markers in the country’s debt management trajectory.
• The 7.625% Eurobond, issued in November 2018 and maturing on 21 November 2025, is a core component of Nigeria’s external borrowing programme, designed to fund infrastructure and bolster foreign reserves.

(Nairametrics)