Nigeria to Begin $6.2bn Eurobond Sale September—Minister
By Adedapo Adesanya
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has confirmed that the sale of the $6.2 billion Eurobonds will commence in September.
The Minister confirmed this information on Thursday at a workshop organised by the Chartered Institute of Stockbrokers (CIS) in Abuja themed Leveraging the Financial Markets to Achieve Double-Digit Economic Growth for Nigeria.
Mrs Ahmed, while declaring the event opened today, noted that the President Muhammadu Buhari led administration was committed to boosting the nation’s economy, adding that 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.
She assured investors that their investments were in safe hands, noting that anytime the country’s Debt Management Office (DMO) called for any bond issuance, it was often oversubscribed.
“In addition, the Federal Government of Nigeria has accessed the international capital market to finance the needed capital deficits.
“The next round of bond issuance will be sold sometime in September this year and we have had positive indications in that regard,” the Minister disclosed.
This development is coming after the Senate in June 2021 approved a loan request of President Muhammadu Buhari for the 2021 budget deficit.
About two weeks ago, the debt office announced that through an open competitive bidding process as stipulated in the Public Procurement Act, 2007 (as amended), it received 38 respondents for the $6.2 billion bond sale at the international market.
The agency had also said from the bidders, it selected only eight, including foreign organisations and local companies.
JP Morgan, Citigroup Global Markets Limited, Standard Chartered Bank and Goldman Sachs made up the four international bookrunners/joint lead managers, while Chapel Hill Denham Advisory Services Limited was taken as the Nigerian bookrunner, FSDH Merchant Bank Limited scaled through as the financial adviser, White & Case LLP was selected as the international legal adviser, while Banwo & Ighodalo was chosen as the Nigerian legal adviser.
“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,” the DMO had said in a notice early August.