By Audrey Lotechukwu
WED 04 AUG, 2021-theGBJournal- The Federal Executive Council (FEC) today approved eight institutions that will be Transaction Advisers for the issuance of Eurobonds by Nigeria in the International Capital Market (ICM) as the country seeks financing for the 2021 budget deficit and to fund various projects in the budget.
The Eurobonds to be issued, are for the purpose of raising funds for the new external borrowing of N2.343 trillion ($6.2 billion) provided in the 2021 Appropriation Act and in line with assurance given earlier in April this year by the Director General of the Debt Management Office (DMO), Patience Oniha, that the amount to be raised will be within the country’s borrowing plan for 2021.
The appointed transaction advisers are of various categories and are required to work with Nigeria (the issuer) to ensure the success of the transactions.
The approved institutions to act as International Bookrunners and Joint Lead Managers are JP Morgan, Citigroup Global Markets Limited, Standard Chartered Bank and Goldman Sachs. Chapel Hill Denham Advisory Services Limited will act as the Nigerian Bookrunner.
FSDH Merchant Bank Limited will act as Financial Adviser while White & Case LPP and Banwo & Ighodalo will act as International Legal Adviser and Nigerian Legal Adviser respectively.
The DMO said in a statement that the Transaction Advisers emerged from an open competitive bidding process as outlined in the Public Procurement Act, 2007 (as amended). The DMO said a total of 38 firms responded to the expression of interest but eight were selected after rigorous evaluation to ascertain the technical capacities of the responders.
The DMO said they now will accelerate activities towards the issuance of the Eurobonds having earlier secured the resolutions of the Nigerian Senate and House of Representatives, in compliance with DMO (Establishment, etc) Act 2003 and the Fiscal Responsibility Act, 2003.
The DMO believes the proceeds from the issuance will result in an inflow of foreign exchange which in turn, will increase Nigeria’s external reserves and support the Naira exchange rate.
The Federal Government had planned to issue the Eurobonds in 2020 but deferred the sale following the COVID-19 pandemic outbreak. The country’s last major issue was in 2018 when it raised $2.86 billion.
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