(Bloomberg) -- Nigeria is selling eurobonds for the first time in more than two years as the African nation seeks reduce its fiscal deficit.
The country is issuing $500 million of 6.5-year bonds as well as a benchmark-size offering of 10-year bonds. Yields are indicated in the 10.125% area for the shorter-dated securities and 10.625% for the longer maturities.
“It is very likely that they will be well subscribed given the limited supply of sovereign issues in Sub-Saharan Africa and due to Nigeria’s ongoing reforms,” said Samantha Singh-Jami, an Africa strategist at Rand Merchant Bank.
African nations were priced out of international capital markets after global interest rates rose sharply in 2022 in response to mounting inflation, but several have returned this year, including Ivory Coast, South Africa, Benin, Senegal, Kenya and Cameroon.
Nigeria last sold eurobonds in March 2022. Africa’s largest oil producer in September raised $900 million in its first domestic sale of dollar-denominated bonds aimed at supporting this year’s budget.
The government has struggled to match public spending with revenue because of disruptions to crude oil production, low tax collection and a lack of economic diversification, burdening public finances. The government announced plans last month to raise $2.2 billion from foreign investors to plug a shortfall in its budget.
Nigeria is rated Caa1 by Moody’s Ratings, and B- by both S&P Global Ratings and Fitch Ratings.
Citigroup Inc. Goldman Sachs Group Inc., JPMorgan Chase & Co., Standard Chartered Plc. are among lenders managing the sale.
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