Nigerian Senate Approves Sale of Extra $500 Million Eurobond

LAGOS (Capital Markets in Africa) – Nigeria’s senate approved a plan on Wednesday for the issuance of an additional $500 million of Eurobonds after demand for the sale of $1 billion of debt securities in February exceeded supply.

The West African nation wants to “take advantage of favorable market conditions,” the government said on its Twitter account. The proceeds from the sale will fund projects in last year’s budget, it said.

Nigeria has sought other sources to finance government spending since the price of crude, its main export, tumbled from peaks reached in the middle of 2014 and violence in the southern oil-rich delta cut output. Africa’s most populous country, on its return to international capital markets for the first time in almost four years in February, said the Eurobond sale was oversubscribed by eightfold. Yields on the securities due February 2032 jumped 11 basis points to 7.55 percent on Wednesday.

The government is raising money to plug the deficit of its 2016 budget, whose implementation was extended into this year partly because authorities delayed approving spending plans by about four months.

Nigeria is increasing investments in power, roads, ports and rail to help its economy recover after a declining oil industry caused it to shrink by 1.5 percent in 2016, the first contraction in more than two decades.