Friday, September 17, 2021 / 8:59 AM / by DMO Nigeria / Header image credit: SeeNews
The Federal Government of Nigeria has announced its intention to issue Eurobonds on the International Capital Market (ICM). The last time Nigeria acceded to the ICM was in November 2018. Virtual meetings with investors are scheduled for September 17 and 20, 2021. In order to benefit local investors, the possibility of investing in euros -bonds, meetings will also be organized with local investors. . This is the first time that local investors will be included in the Roadshows, and it is one of the reasons why a Nigerian bookrunner (Chapel Hill Denham Advisory Services Ltd) has been appointed as one of the advisers. transaction.
Through the Eurobond issuance, Nigeria is expected to raise up to $ 3 billion, but no more than $ 6.2 billion. The issue for which all statutory approvals have been received is for the purpose of implementing the new external borrowing in the Appropriation Law 2021. The proceeds are intended to finance various projects of the Law.
In addition to providing funding to partially finance the deficit in the 2021 budget law, Nigeria’s Eurobond issuance benefits the country in many other strategic ways; among which are:
- This is an influx of foreign currency, leading to an increase in external reserves. External reserves help to support the exchange rate of the naira and the sovereign rating of Nigeria.
- When Nigeria raises funds abroad, through Eurobonds, it frees up space in the domestic market for the private sector and subnational borrowers. Indeed, it helps the sovereign not to crowd out other borrowers on the domestic market.
- Nigeria’s issuance of Eurobonds has opened up opportunities for the Nigerian corporate sector, especially banks, to issue Eurobonds to raise capital in the ICM. In doing so, their capital base has been strengthened to provide banking services while meeting regulatory requirements. Nigeria has a sovereign yield curve in the ICM, extending up to 30 years.
- The local listing of Nigerian Eurobonds on the Nigerian Exchange Ltd. and the FMDQ Securities Exchange Ltd., made it possible to expand the range of products on these two (2) exchanges and their respective market capitalization.
Overall, Nigeria’s Eurobond issuances and pre-pricing investor meetings have provided Nigeria with a strong global platform to tell its own story and the opportunities available in Nigeria for investors.
The Transaction Advisors appointed by Nigeria for the issue are:
International Bookkeepers / – JP Morgan, Citigroup Global Markets Limited,
– Standard Chartered Bank and Goldman Sachs.
Nigerian Bookrunner – Chapel Hill Denham Advisory Services Ltd
Financial Advisor – FSDH Merchant Bank Ltd
International Legal Advisor – White & Case LLP
Nigerian Legal Advisor – Banwo & Ighodalo
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