Africa news

Published: May 4, 2017

Investors pour into Nigeria despite deep recession

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


Nigeria surprised the market on February 9 by how cheaply it could raise debt, when the sovereign printed a US$1bn 15-year bond at a 7.875% yield, well inside initial talk levels of 8.5% area.

“It was a fantastic deal,” Khalil Belhimeur, a syndicate official at Standard Chartered Bank, which ran the deal alongside Citigroup, told EMEA Finance. “We tightened by more than 60bp from IPTs – that is a reflection of the slightly cautious feedback we were getting from investors and the momentum that the book started to gather once we opened it.”

 The huge take up of the paper, and subsequent price revisions, caught some investors off guard – though they still piled into the book, pushing orders above US$7.8bn.

“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.”

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