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DMO appoints transaction advisors and bookrunners.
America’s JP Morgan, Citigroup, Goldman Sachs and Britain’s Standard Chartered have succeeded in the bid to be the international bookrunners to Nigeria’s Debt Management Office, DMO.
The Federal Executive Council, FEC has also approved the appointment which the DMO recently announced in a document.
The DMO further said that it will accelerate activities towards the Issuance of the Eurobonds which it had planned earlier in 2020. Its last and sixth Eurobond sale in 2018 raised $2.86 billion.
- FGN bonds issuance calendar for the second quarter of 2021 – DMO
- BudgIT calls out FG to reform 2021 budget of N13.08trn
- The DMO announces a Debt to GDP ratio of 21.61% – N32.91trn
More so, it will now progress with the plan to raise foreign currency loans in the second half of 2021.
In October 2020, the FG had said it will seek domestic and foreign sources to finance the 2021 budget deficits. It expects to finance the 2021 budget deficit of N5.6 trillion largely from foreign and local borrowings.
The deficit represents 3.64% of Nigeria’s estimated GDP even though the fiscal responsibility act has a provision that states it should not exceed 3%.
The Eurobonds to be issued, are for the purpose of raising funds for the New External Borrowing of N2.343 trillion (about $6.2 billion) provided in the 2021 Appropriation Act to part finance the Deficit.
The proceeds from the Eurobonds will be used to fund various projects in the budget aligning with its goal to part-finance the 2021 deficit.
In addition, the proceeds will result in an inflow of foreign exchange. This will further help enhance Nigeria’s External Reserves and support the Naira Exchange Rate.
DMO appoints local advisors for Eurobond sales
The DMO also named Chapel Hill Denham Advisory Services Limited as local the bookrunner. FSDH Merchant Bank Limited, as a financial adviser and Banwo & Ighodalo, as legal adviser.
- FG’s Plan To Address Revenue Leakages And Monitoring 2021 Budget Implementation
- FG To Finance 2021 Budget Deficit Of N5.6 Trillion With Loans
White& Case LLP will act as the international and transaction advisor.
Being mindful of costs and risks (in terms of tenor and pricing) in determining the amount of Eurobonds to issue, the government still expects a successful outing.
