FG to meet investors over $6.2bn Eurobond-DMO
Nigeria will be meeting local and international investors on the $6.2 billion Eurobond issuance from the international capital markets, according to the Debt Management Office (DMO).
The meeting would avail investors of the opportunity presented by the Eurobond issuance, explain reason for the loan and how they can invest in the bond.
“This is the first-time local investors will be included in the Roadshows, and this is one of the reasons why a Nigerian Bookrunner (Chapel Hill Denham Advisory Services Ltd) was appointed as one of the Transaction Advisers,” the DMO said.
Part of the fund will be used to finance deficit in the 2021 budget and finance other projects in the Appropriation Act.
The loan comes three years after participating in the International Capital Market (ICM), aligns with the country’s implementation of the New External Borrowing in the 2021 Appropriation Act.
In a statement, DMO, said the issuance has received all statutory approvals adding that the “proceeds are for the financing of various projects in the Act. ”In addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of Eurobonds by Nigeria benefits the country in many other strategic ways,” it said.
Nigeria “is expected to raise up to $3 billion but not more than $6.2 billion through a Eurobond issuance in the International Capital Market (ICM),” it said.
The Eurobond issuance the DMO noted, will benefit the country in many respects as “it is an inflow of foreign exchange, leading to an increase in External Reserves. External Reserves help support the Naira Exchange Rate, and Nigeria’s sovereign rating”.
Also, when Nigeria raises funds externally, through Eurobonds, it frees up space in the domestic market for private sector and sub-national borrowers. In effect, it helps the sovereign not to crowd out other borrowers in the domestic market.
The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector notably banks, to issue Eurobonds to raise capital in the ICM. By so doing, their capital base has been strengthened to provide banking services whilst also meeting regulatory requirements. Nigeria has a sovereign yield curve in the ICM, extending up to 30 years.
The local listing of Nigeria’s Eurobonds on the Nigerian Exchange Ltd. and the FMDQ Securities Exchange Ltd., have increased the range of products on these two exchanges and their respective market capitalization.
The DMO added that the “Eurobond issuances by Nigeria and the investor meetings that precede the pricing, have provided a strong global platform for Nigeria to tell its own story and opportunities available in Nigeria for investors”.
The Transaction Advisers appointed by Nigeria for the issuance are: International Bookrunners/JP Morgan, Citigroup Global Markets Limited; Joint Lead Managers -Standard Chartered Bank and Goldman Sachs; Nigerian Bookrunner- Chapel Hill Denham Advisory Services Ltd; Financial Adviser-FSDH Merchant Bank Ltd; International Legal Adviser – White and Case LLP; Nigerian Legal Adviser- Banwo and Ighodalo.
The last time Nigeria accessed the ICM was November 2018. Virtual meetings with investors have been scheduled for September 17 and September 20, 2021. (VON)
