Fundamentals cast aside as Nigeria triumphantly returns to bonds

Published: February 17, 2017

Nigeria made a barn-storming return to the US dollar bond market on February 9 when it defied expectations and shaky fundamentals to print below 8% yield on a book that almost hit US$8bn.

Investors were surprised by the huge take up in the book, which saw the US$1bn 15-year bond price at 7.875% yield, after initial talk of 8.5% area.

“We were expecting this to come at 8% or above,” one investor told EMEA Finance. “But the size of the book means that this should still trade well in secondary.”

The new bonds, Nigeria’s first dollar deal in over three years, were trading at a cash price of 103.5 on February 14, after printing at par.  

A banker close to the transaction told EMEA Finance that the demand for the trade was almost entirely technical.

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