N2.343trn Borrowing: FEC appoints Advisers for Eurobond Issuance

By Etuka Sunday

The Federal Executive Council (FEC) at its meeting on Wednesday, August 4, 2021, approved the selection of eight (8) institutions to advise on the Eurobond Issuance.

Debt Management Office (DMO) in a statement said,  the eight (8) institutions were selected from the  total of thirty-eight (38) institutions that responded to the Expression of Interest.

The office said, activities by Nigeria towards the issuance of Eurobonds in the International Capital Market (ICM) has inched forward with the appointment of Transaction Advisers by the Federal Government.

It said,  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.

The institutions approved by FEC to advise on the Eurobond Issuance are:

a. International Bookrunners/   –     JP Morgan, Citigroup Global Markets Limited, Joint Lead Managers             Standard Chartered Bank and Goldman Sachs.

b. Nigerian Bookrunne -Chapel Hill Denham Advisory Services Ltd

c.       Financial Adviser        –            FSDH Merchant Bank Ltd

d.       International Legal Adviser    –     White & Case LLP                             e.             Nigerian Legal Adviser      –               Banwo & Ighodalo                                DMO noted that the Transaction Advisers emerged from an Open Competitive Bidding Process as outlined in the Public Procurement Act, 2007 (as amended).

It said,  “a total of thirty-eight (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 (8) 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,” the statement said.

It will be recalled 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 Eurobonds to be issued, are for the purpose of raising funds for the New External Borrowing of N2.343 trillion (about USD6.2 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.