Nigeria wants to raise $1bn Eurobond
NIGERIA will soon meet investors before a Eurobond sale and plans to apply for a $1 billion (R13.46bn) loan from the World Bank once lawmakers approve this year’s budget, Finance Minister Kemi Adeosun said.
“We are about to embark on the roadshow” for the dollar bond, Adeosun said in Abuja, on Wednesday, without giving more details.
She and Vice President Yemi Osinbajo previously said they want to raise $1bn in what would be Nigeria’s first Eurobond since 2013.
The government hired Citigroup and Standard Chartered Bank to organise the roadshow in the US and London from today, according to a person familiar with the matter.
The notes and the World Bank loan would help plug a fiscal deficit forecast by the government to be 2.36 trillion naira (R102 billion) this year, Adeosun said.
President Muhammadu Buhari presented a record 7.3trn naira spending plan to lawmakers in December in a bid to stimulate an economy experiencing its worst downturn in more than two decades, thanks to oil prices crashing since 2014 and investors fleeing the country.
Gross domestic product probably shrank 1.5 percent in 2016, marking the first full-year recession since 1991, according to the International Monetary Fund (IMF).
While Nigeria sought about $4.5bn of external funding last year, it only managed to borrow $600m from the African Development Bank, which will be used for power generation, roads, railways and ports.
The government has struggled to obtain more financing as foreign investors and the IMF have criticised its currency policies.
They say the Nigerian government has left the naira overvalued and that has led to a severe shortage of the foreign-exchange businesses’ need to import raw materials and equipment.
The naira trades around 315 per dollar on the official interbank market and fell to a record 500 on the black market this week as the dollar scarcity worsens.
The yield on Nigeria’s $500 million Eurobond due in July 2023 snapped six days of increases to decline by 1 basis point, to 6.89 percent, by 8.41am in London yesterday. – Bloomberg