FG engages JP Morgan, others to facilitate fresh $6.2bn borrowing

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The Federal Government of Nigeria has appointed eight institutions as transaction advisers for the issuance of Eurobonds by Nigeria in the International Capital Market (ICM).

The Debt Management Office (DMO) disclosed this in a press release published on its website on Wednesday.

According to the release, the institutions were approved by the Federal Executive Council (FEC) at its meeting on Wednesday to advise on the Eurobond issuance.

DMO said that, “Activities by Nigeria towards the issuance of Eurobonds in the International Capital Market inched forward today (Wednesday) with the appointment of Transaction Advisers by the Federal Government.

“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.”

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The institutions include International Bookrunner (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 & Case LLP), and Nigerian Legal Adviser (Banwo & Ighodalo).

“The Transaction Advisers emerged from an Open Competitive Bidding Process as outlined in the Public Procurement Act, 2007 (as amended).

“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.

“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 release stated in part.

DMO further stated that the Eurobonds to be issued were for the purpose of raising funds for the New External Borrowing of N2.343 trillion (about US$6.2 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,” the release further read.

 

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