The recent economic recession in Nigeria was evident in the severe pressure on corporate performances.
A combination of weaker revenue, higher production cost, bloated finance expenses and unbearable impairment losses hammered profit margins across sectors. 
To restore positive GDP growth via expansive fiscal response, the federal government embarked on a broad-based borrowing scheme driving the cost of funds in the local debt market to record high amid higher inflation rate and a very aggressive monetary policy stance.
Although an attractive yield environment has, evidently, been positive for FX liquidity, it also crowded-out corporate debt issuers from the domestic market.
Accordingly, the Primary segment of the equities market witnessed increased activities, as a number of consumer and industrial goods companies resorted to the relatively expensive equity capital raise (compared to debt) via right issues.
However, the banks opted for the relatively low-cost Eurobond market, leveraging on their decent credit profile and improving economic fundamentals to boost medium-term capital need and meet the demand for their foreign currency transactions.
Since Q4-16: ZENITH ($500mn); UBA (500mn) and ACCESS (300mn) and Fidelity ($400mn) have issued Eurobond, totalling $1.7 billion.
As macro headwinds subside, we highlight that there is a need for concerted effort by fiscal and monetary authorities to ensure a more corporate-friendly interest rate environment.
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