$1.25 billion, is being issued at 8.375 per cent, according to the DMO. It is a premium compared to existing tenors as the West African nation seeks to raise cash to fund a costly petrol subsidy scheme. “The choice to go ahead with the Eurobond issue in the current adverse market conditions is likely connected to continued force majeure reducing oil revenue, while retained fuel subsidies are spiralling in tandem with the higher oil price,” Mark Bohlund, senior analyst at Redd Intelligence, said.
Speaking to Reuters news agency last week, Finance Minister Zainab Ahmed revealed that from the funds raised in an Eurobond sale last year, Abuja is looking to tap €2 billion ($2.2 billion) this month or the next. She added that more local borrowing is targeted for this year to help fund the government’s costly petrol subsidies amid hikes in oil prices, after it extended its subsidies by 18 months in January. Meanwhile, oil prices have soared to a record high, placing an undue burden on the government budget for subsidies on petroleum products as the country depends on imports almost entirely to meet its domestic gasoline needs.
