Nigeria’s Debt Office Selects Bookrunners for Eurobond Issue
Following the plan to raise $6.18 billion foreign currency loans in the second half of 2021, Nigeria’s Debt Management Office (DMO) has announced the appointment of JP Morgan, Citigroup, Standard Chartered and Goldman Sachs as transactions advisers.
The DMO said in a statement that the transaction advisers emerged from an Open Competitive Bidding Process as outlined in the Public Procurement Act, 2007 (as amended).
Nigeria appoints Chapel Hill Denham Advisory Services Limited as local the bookrunner for the issue, FSDH Merchant Bank Limited as a financial adviser while Banwo & Ighodalo will act as legal adviser.
A total of thirty-eight (38) institutions responded to the Expression of Interest, and after rigorous evaluation to ascertain the technical capacities of the responders to execute the Transaction, the eight (8) institutions above were selected.
With the approval of the Transaction Advisers by FEC, the Debt Management Office (DMO) will now accelerate activities towards the Issuance of the Eurobonds.
It will be recalled that the Resolutions of the Senate and the House of Representatives, in compliance with the Debt Management Office (Establishment, Etc.) Act, 2003 and Fiscal Responsibility Act, 2003, had earlier been secured.
The Eurobonds to be issued, are for the purpose of raising funds for the New External Borrowing of N2.343 trillion (about USD6.2 billion) provided in the 2021 Appropriation Act to part finance the Deficit.
Whilst the Government expects a successful outing, it will be mindful of costs and risks (in terms of tenor and pricing) in determining the amount of Eurobonds to issue.
Since the Eurobonds are being issued to part-finance the 2021 Budget Deficit, the proceeds will be used to fund various projects in the Budget.
In addition, the proceeds will result in an inflow of foreign exchange which in turn, will increase Nigeria’s External Reserves and support the Naira Exchange Rate.
Africa largest economy had planned a Eurobond issue early last year after its sixth sale in 2018 where it raised $2.86 billion.
The government expects a 2021 budget deficit of N5.6 trillion to be financed largely from foreign and local borrowings.
The new issuance will raise push total public debt higher and some analysts polled by MarketForces Africa said Nigeria will be lucky if the nation’s debt burden stays below N40 trillion in 2021.
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Nigeria’s Debt Office Selects Bookrunners for Eurobond Issue
