The Federal Government has returned to the international capital market with a $2.25bn Eurobond issuance that drew massive investor demand, despite lingering geopolitical tension sparked by US President Donald Trump’s threat of military action against the country.

The dual-tranche Eurobond, comprising 10-year and 20-year notes, was oversubscribed by more than four times, attracting over $9.1bn in orders from global investors.

According to the Debt Management Office, the strong demand enabled the Federal Government to price the debt at lower yields than initially indicated, underscoring renewed confidence in Africa’s largest economy.

The 10-year tranche, which sought to raise $700m, received bids worth about $4.9bn, while the longer 20-year tranche, targeting $1.5bn, drew $4.2bn in offers.

The bonds were ultimately priced at yields of 8.75 per cent and 9.25 per cent respectively, lower than earlier guidance of 9.125 per cent and 9.625 per cent. Proceeds from the issue will be used to finance the government’s budget deficit and refinance a $1.1bn Eurobond maturing later this month.

Wednesday’s sale came after Trump warned of possible US military intervention in Nigeria over alleged killings of Christians, a statement that briefly rattled the nation’s long-dated sovereign bonds. The 2051 issue dipped by about 0.5 cents earlier in the week before rebounding on renewed investor appetite.

The successful Eurobond sale highlights investors’ willingness to look beyond short-term political noise in favour of Nigeria’s higher yields and improving fiscal outlook. Nigeria’s successful return to the Eurobond market comes amid a resurgence of African sovereign debt issuance.

The Republic of Congo this week issued its first Eurobond in nearly two decades, a $670m, seven-year note priced at a yield of 13.7 per cent. Kenya and Angola also returned to the market last month, as easing global borrowing costs and robust demand for high-yield assets fuel renewed investor interest in emerging markets.

Data from JPMorgan Chase & Co. show that the average spread for African sovereign debt over US Treasuries has fallen to about 379 basis points, almost half its level in April, reflecting improved confidence in the region’s debt profile.

In September, the Federal Executive Council approved plans to raise $2.3bn through Eurobond sales as part of the 2024–2025 borrowing plan, with an additional $1.1bn set aside to refinance maturing foreign obligations. The National Assembly earlier endorsed a $2.85bn foreign borrowing ceiling.

The issuance, the first since December 2024, marks another step in the government’s bid to rebalance its debt portfolio, deepen foreign exchange reserves, and attract portfolio inflows at a time of tight domestic liquidity and fiscal strain.

Despite concerns over Nigeria’s rising debt-service burden, the oversubscription underscores continued investor faith in the country’s reform path and its capacity to service obligations. The 10-year notes are due in January 2036, while the 20-year tranche will mature in January 2046.