Akpata: $500mn domestic bond likely to be oversubscribed

Nigeria is on the brink of closing a significant chapter in its financial history as the $500 million domestic bond offer at a coupon rate of 9.75 per cent is set to draw to a close. Egie Akpata, Chairman of Skymark Partners, has weighed in on the potential success of this venture, pointing towards oversubscription due to the attractive coupon rate surpassing the yield on the Nigeria 2029 Eurobond. Akpata's insights shed light on the dynamics of the domestic bond market, offering a compelling outlook on Nigeria's debt financing landscape. The government's endeavor to boost FX liquidity and honor foreign debts while tapping into the local investor base through this bond signifies a shift towards self-sufficiency in raising U.S. dollars. This move has evoked curiosity and interest among both local and international investors, signaling a potential paradigm shift in Nigeria's debt fundraising strategy. As the curtains draw on the initial phase of this landmark bond offer, the implications for Nigeria's debt sustainability and market liquidity are being closely scrutinized. The prospects of a robust secondary market and the government's recurring need for debt servicing further underscore the significance of this undertaking. Akpata's analysis underscores the importance of sustained investor confidence and governmental commitment to fiscal responsibility in paving the way for a more stable and sustainable debt trajectory. Despite the challenges posed by Nigeria's debt burden, the ongoing efforts to explore innovative financing solutions mark a pivotal juncture in the nation's economic narrative.