President Bola Tinubu has sent a request to the House of Representatives, seeking approval to access external capital of $2.347billion.
This comprised of new external borrowing of N1.843 trillion, at the budget exchange rate of $1.00/N1,500.00) in the 2025 Appropriation Act for the part-financing of the budget deficit and refinancing of $1.118billion Eurobonds.
This is to be accessed through any of the following option(s) in the International Capital Market (ICM): Issuance of Eurobonds, Loan Syndications, Bridge Finance Facility from Bookrunners and Direct Borrowing from International Financial Institutions.
Tinubu, in a letter to Speaker Abbas Tajudeen read at plenary on Tuesday, also sought the resolution of the House to approve the issue of a stand-alone debut Sovereign Sukuk of up to $500m in the ICM with or without credit enhancement (Guarantee).
Explaining the implementation of new external borrowings in the 2025 Appropriation Act, Tinubu said: “the House may wish to note that 2025 Appropriation Act provides for N9,276,348,934,935.79 as New Borrowings to part-finance the 2025 Budget Deficit, of which #1,843,669,786,987.16 (equivalent of about USD1,229,113,000.00 at the Budget Exchange Rate of USD1.00/N1,500.00).
“The House of Representatives is kindly invited to issue its Resolution allowing the Government to raise the amount through any of the following options: Issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication and Direct Borrowing from International Financial Institutions.
“The House of Representatives may wish to note that Eurobonds of USD1,118,352,000.00 (7.625% US$1.118BN NOV 2025) issued in the ICM on November 21, 2018, with an original tenor of 7 years, will mature on November 21, 2025.
“The plan is to refinance the maturing Eurobonds through issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication, or Direct Borrowing from International Financial Institutions, if necessary to avoid default.
“This is a standard practice in debt capital markets, including the ICM. The proposal is for the House of Representatives to issue its Resolution authorising the FGN to refinance the Eurobonds, accordingly.
“Based on the presentations in Paragraphs 2 and 3, the aggregate amount proposed to be raised in the ICM either through Issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication and Direct Borrowing from International Financial Institutions or combination of the options for which Resolution of the House of Representatives is being sought is USD2,347,465,000.00.
“Whilst exploring all the options, the plan is to focus on the Issuance of Eurobonds, and we believe that Nigeria, being a regular issuer of Eurobonds in the ICM could raise the proposed amount, subject to market conditions. The House of Representatives may wish to note that because Eurobonds Issuance is a market-based transaction, the terms and conditions can only be determined at the time of the transactions, and they will be subject to prevailing market conditions.
“The Federal Ministry of Finance (FMF) and the Debt Management Office (DMO) will work with the Transaction Advisers to secure the most favourable terms and conditions. The Indicative Terms and Conditions for Issuance of USD2.347 billion Eurobonds in the ICM is attached as Annexure 1. Meanwhile, it is expected that the pricing of the new Eurobonds will reflect the Yields on Nigeria’s Eurobonds trading in the ICM at the time of Issuance, while Tenors will be guided by investors’ preferences, price and the DMO’s liability management strategy.”
The letter further read: “The House of Representatives is invited to issue its Resolution authorising the Issuance of a stand-alone debut Sovereign Sukuk of up to USD500m in the ICM based on the following reasons, amongst others:
“The FGN has recorded considerable success in the Issuance of Sukuk in the domestic capital market for the development of critical infrastructure projects across the country. Between September 2017 and May 2025, the DMO has raised N1,392.557 trillion through Sukuk in the domestic capital market to fund critical road infrastructure projects.
“There is the need to pool resources from external sources to complement domestic issuance to help bridge infrastructure funding gaps; and, it is imperative to open new sources of funding for the FGN, and thereby diversify investor base, as well as deepen the FGN Securities market.
“The proposal is for the House of Representatives to approve the issuance of a stand-alone debut Sovereign Sukuk with or without credit enhancement (Guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.
“Based on the foregoing, I respectfully request the House of Representatives to pass a Resolution: to raise external capital in the sum of USD2,347,465,000.00 comprised of New External Borrowing in the 2025 Appropriation Act (USD1,229,113,000.00) and refinancing of maturing Eurobonds (USD1,118,352,000.00), through any of the following option(s).
“Issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication and Direct Borrowing from International Financial Institutions.
“To issue a debut stand-alone Sovereign Sukuk of up to USD500 million, with or without credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit.”
