Fitch assigns B+ rating to Nigeria’s $1 billion Eurobond

06 Feb 2017
Financial Nigeria

Summary

Last week, a government delegation led by Kemi Adeosun attended roadshows in London and the United States to generate investor interest for the country’s upcoming $1 billion Eurobond.

Nigerian Minister of Finance Kemi Adeosun

Fitch Ratings has assigned a B+ rating to Nigeria’s forthcoming $1 billion Eurobond, according to a statement released on Monday. The New York-based firm said its ratings decision was in line with the country’s long-term foreign-currency issuer default rating (IDR), which has a B+ rating with a negative outlook.

The B+ rating is the lowest investment grade rating assigned to a security, signifying that the issuer is relatively stable with a moderate chance of default, according to Investopedia.

Last week, a federal government delegation led by Kemi Adeosun, Nigeria’s Minister of Finance, attended roadshows in London and the United States in an effort to generate investor interest for the country’s upcoming $1 billion Eurobond.

The investor meetings were organized by Citigroup and Standard Chartered. Other members of the government delegation were Sarah Alade, Deputy Governor, Economic Policy, Central Bank of Nigeria; Udo Udoma, Minister of Budget and National Planning; and Abraham Nwankwo, Director General of the Debt Management Office.

The bond offering is part of the government’s efforts to raise adequate funding to plug Nigeria’s budget deficit. In the 2017 budget of N7.298 trillion, the fiscal deficit is estimated to reach N2.36 trillion. The government plans to finance that deficit by raising N1.067 trillion from foreign markets and N1.254 trillion from domestic markets.

The planned $1 billion Eurobond would become the first time the country will raise funds from international financial markets since July 2013 after an inaugural issue in 2011.


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