FG to Pick Advisers for $3.3bn Eurobond via Open Bids

The federal government plans to appoint transaction advisers for a potential $3.3 billion Eurobond issue through an open competitive bid process, the Debt Management Office (DMO) said on Friday.

The new Eurobond, the first after the 2018 issuance, will be used to partly fund the 2020 budget deficit and refinance an existing $500 million Eurobond due in January next year, Reuters quoted DMO to have said.

Already, the request for its approval had been sent to the National Assembly and the process is expected to be completed in the first quarter of this year, a source hinted yesterday.

Nigeria issued a record $10.7 billion of international bonds in 2018, and some investors were betting the country would sell more paper in 2019 to cover the shortfall, projected at N2.5 trillion ($6.9 billion).

But the federal government last year, kept to its stand not to tap international debt markets in 2019 due to time constraints before the end of its budget cycle.

The Director-General, DMO, Ms. Patience Oniha, said last October that the federal government would not sell international debt in 2019 because the implementation of the 2019 budget was already drawing to a close.

The last Eurobond sale was in 2018, where the country raised $2.86 billion. Citigroup, Standard Chartered Bank and local firm FSDH Merchant Bank acted as financial advisers on Nigeria’s last Eurobond sale.

Minister of Finance, Budget and National Planning, Zainab Ahmed hinted last December that the country could issue Eurobonds in the first quarter of this year to finance the 2020 budget, but would first discuss with concessional lenders before deciding.

But the DMO boss stated recently that Nigeria could still choose other sources of financing for this year, but noted that the timing of a bond issuance will depend on “market conditions and other considerations”.

Nigeria’s total debt profile, according to information posted by DMO’s website stood at N25.7 trillion ($83.88 billion), comprising N17.38tn ($56.72bn) domestic, and N8.32tn ($27.162bn) external as at last October.

In December last year, the Minister of Information and Culture, Alhaji Lai Mohammed, said there was no cause for alarm over the country’s debt profile both domestic and external as being speculated by those he described as scaremongers.

He claimed there were misrepresentations in the figures being pushed out in certain quarters about the debt profile, adding that the country had not reached its debt ceiling of 25 per cent in total public debt stock to Gross Domestic Product (GDP).