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Monday, March 20, 2023

FG Appoints Eight Transaction Advisers for $6.2bn Eurobonds

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Preparatory to the issuance of N2.343 trillion ($6.2 billion) Eurobonds in the International Capital Market (ICM) to partly finance its N5.2 trillion 2021 Budget deficit, the federal government has appointed eight international and domestic transaction advisers.

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 for in the 2021 Appropriation Act to part-finance the budget deficit.

The eight transaction advisers include international bookrunners/joint lead managers–JP Morgan, Citigroup Global Markets Limited, Standard Chartered Bank and Goldman Sachs.

The Nigerian bookrunners to the proposed issuance is Chapel Hill Denham Advisory Services Ltd and FSDH Merchant Ltd who will act as financial adviser.

White & Case LLP would act as the international Legal Adviser while the firm of Banwo & Ighodalo are the Nigerian Legal Advisers.

The Debt Management Office (DMO) announced yesterday that the eight Transaction Advisers emerged following an open competitive bidding process as outlined in the Public Procurement Act, 2007 (as amended).

It disclosed that a total of 38 institutions responded to the Expression of Interest (EoI) and after rigorous evaluation to ascertain their technical capacities, eight institutions were selected.

With the approval of the Transaction Advisers by Federal Executive Council (FEC), the DMO said it would accelerate activities towards the issuance of the debt instrument.

The resolutions of the Senate and the House of Representatives, in compliance with the DMO (Establishment, Etc.) Act, 2003 and Fiscal Responsibility Act, 2003, had earlier been secured.

The Eurobonds to be issued are for the purpose of raising funds for the new external norrowing of N2.343 trillion (about USD6.2 billion) provided in the 2021 Appropriation Act to part-finance the Deficit.

The DMO stated that while the federal government expects a successful outing, it would be mindful of cost and risks (in terms of tenor and pricing) in determining the amount of the Eurobonds to issue.

According to the agency, since the Eurobonds are being issued to part-finance the 2021 Budget deficit, the proceeds would be used to fund various projects in the budget.

In addition, the proceeds would result in an inflow of foreign exchange which in turn, would increase Nigeria’s external reserves and support the exchange rate of the local currency.

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