BY KENNETH EZE
The Debt Management Office says that local investors would be afforded the opportunity of participating in the Eurobond issuance through which the federal government plans to raise between $3 billion and $6 billion for funding the 2021 Appropriation Act.
In a statement, DMO’s spokesperson, Chinenye Onu, highlighted that this was the first time local investors would get the opportunity of participating in the Eurobond issuances of the DMO, for which a local transaction adviser has been appointed.
She added that roadshows, which kicked-off with virtual meetings at the international level held last Friday, would also be held locally in due course.
It said, “In order to avail local investors, the opportunity to invest in the Eurobonds, meetings will also be held with local investors.
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.”
It further disclosed that the federal government “plans for a Eurobond issuance in the International Capital Market (ICM).”
The Point reports that the last time the Nigerian government issued Eurobond was in November 2018.
It revealed that “Through the Eurobond issuance, Nigeria is expected to raise up to $3 billion but no more than $6.2 billion.
“The issuance, for which all statutory approvals have been received, is for the purpose of implementing the New External Borrowing in the 2021 Appropriation Act.
“Proceeds are for the financing of various projects in the Act.”
The statement averred that in addition to helping fund the 2021 Appropriation Act, “the issuance of Eurobonds by Nigeria benefits the country in many other strategic ways,” including “inflow of foreign exchange, leading to an increase in External Reserves,” which would “help support the Naira Exchange Rate, and Nigeria’s sovereign rating.”
Still on the other benefits, the statement listed that the issuance “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,” among other benefits.
The Eurobond would also boost the domestic capital market with local listing. “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 (2) exchanges and their respective market capitalization,” it added.
