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Nigeria suspends plan to issue Eurobond due to time lapse, unfavourable market conditions

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Nigeria has suspended its plans to issue fresh $950 million Eurobond as a result of unfavourable market conditions during the time frame approved for the fundraising, according to the Minister of Finance and Budget, Zainab Ahmed.

The government had announced two months ago that it planned to sell as early as May its second external debt this year to help plug fiscal deficits.

The planned $950 million bond sale would account for the balance of $6.1 billion in foreign debt planned for 2021 after it raised the second tranche of $1.25 billion in March.

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A foreign news agency quoted Ahmed as saying in an interview on the sidelines of the Islamic Development Bank meetings in Egypt that the country is backtracking on the Eurobond issuance because the approval period has closed.

“We were not able to do that because the market pricing was not good and also the approval period for us has closed. The approval period was up to May 31, 2022, so we are not going to be able to take that one anymore,” Ahmed was quoted as saying.

Africa’s biggest crude producer was one of the first sovereigns to tap the Eurobond market after the start in late February of Russia’s war on Ukraine, which stoked commodity prices and inflation just as the US Federal Reserve raised interest rates.

Nigeria’s seven-year bond in March was priced to yield 8.375 per cent, compared to a similar maturity raised about eight months ago with a coupon of 6.125 per cent.

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