Activities by Nigeria towards the issuance of Eurobonds in the international capital market (ICM) inched forward yesterday with the appointment of transaction advisers by the federal government.
The government said it is towards financing the 2021 appropriation Act.
Typical of Eurobond issuance, transaction advisers of various categories are required to work with an issuer, in this case, Nigeria, to ensure the success of the transaction.
Institutions were approved by the federal executive council (FEC) at its meeting yesterday to advise on the Eurobond issuance, the Debt Management Office (DMO) said yesterday.
The institutions appointed are: International Bookrunners/- JP Morgan, Citigroup Global Markets Limited, Joint Lead Managers, Standard Chartered Bank and Goldman Sachs; Nigerian Bookrunner – Chapel Hill Denham Advisory Services Ltd and Financial Adviser-FSDH Merchant Bank Ltd.
Others are: International Legal Adviser – White & Case LLP and Nigerian Legal Adviser – Banwo & Ighodalo.
“The transaction advisers emerged from an open competitive bidding process as outlined in the Public Procurement Act, 2007 (as amended). A total of 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 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 stated.
Recall 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 debt office said.
The the DMO said the Eurobonds to be issued, are for the purpose of raising funds for the New External Borrowing of N2.343 trillion (about $6.2 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.