The $3 billion Eurobond floated by the federal government through the Debt Management Office and the ministry of finance was oversubscribed by almost four times.
According to a statement released by Kemi Adeosun, minister of finance, the Eurobond had a total demand of $11.4 billion.
The debt instrument, which was released in two tranches, has a tenor of 10 years and 30 years.
Nigeria had earlier floated a $1 billion Eurobond in February and it was oversubscribed by eight times.
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According to the statement, $2.5 billion of the proceeds will be used to fund capital projects in the 2017 budget.
“The full $1.5 billion proceeds of the 30 year notes are allocated to 2017 capital projects.
“Of the $1.5 billion of 10 year notes, $1 billion will be allocated to the 2017 capital budget, under our $2.5 billion approval from the national assembly, with the balance of $500 million allocated to refinancing of domestic debt, in line with our strategy to re-balance our domestic/international debt profile.
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“Capital projects under the 2017 budget include road, rail, power and housing projects which are crucial to the delivery of the economic recovery and growth plan.”
The ministry had requested for legislative approval to borrow $5.5 billion, with Adeosun explaining that $3 billion of the total sum would be used to refinance debts left by Goodluck Jonathan’s administration.
The interest rates for the Eurobond are 6.5 percent and 7.625 percent for the 10-year and 30-year bond respectively.
“Establishing a 30-year financing portfolio provides the basis for long term infrastructure funding, which will, in turn, provide a benchmark for the private sector to extend its own financing tenures,” the ministry said, defending the need for a long term bond.
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“Establishing long term funding will enable us to build the infrastructure that we, and our children, will benefit from for the next 50 years.”
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