October 10, 2025/CSL Research

Authorities are planning a US$2.3bn Eurobond issuance before year-end to support budgetary needs and undertake liability management operations, particularly considering the upcoming US$1.1bn Eurobond maturity due next month. This planned issuance would mark Nigeria’s return to the international debt market following the successful US$2.2bn Eurobond sale last December, which was nearly four times oversubscribed. This planned issuance aligns with our earlier view that Nigeria could return to the market before the end of the year to raise at least US$2bn.  

In terms of structure, we maintain that the authorities are likely to opt for a 10-year amortising Eurobond, taking advantage of the yield gap between the 2034s and 2038s on the curve. On pricing, market conditions remain favourable, with yields across Nigeria’s Eurobond curve having declined by an average of 168 basis points year-to-date (YtD). We expect strong investor demand, supported by growing confidence in Nigeria’s economy following recent reform measures and by the global trend towards lower interest rates, which continues to boost appetite for emerging market assets. 

Additionally, reports indicate that plans are underway for a foreign Sukuk issuance valued at approximately US$500m. This aligns with our earlier view that Nigeria may accelerate the issuance of non-conventional instruments, such as green or sustainable bonds, in line with the growing trend among Sub-Saharan African (SSA) sovereigns seeking access to ESG-linked financing at relatively lower costs. Such instruments typically attract dedicated pools of capital from global investors focused on sustainability and responsible investing, broadening Nigeria’s funding base while enhancing its ESG profile in the international debt market. 

We expect the planned issuances to strengthen external reserve accretion, which has been on an upward trend in recent months, with the 30-day moving average rising to US$42.6bn as of October 7, 2025. The anticipated inflows are also expected to boost liquidity in the foreign exchange market, thereby supporting both the stability and continued appreciation of the local currency. However, given that the proceeds will likely be used to finance fiscal operations, the borrowings could contribute to increased fiscal deficit pressures in the near term (see chart below).

Click here to download full report: ​​​​CSL Nigeria Daily – 10 October 2025 – Debt.pdf​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​