Nigeria appoints Citigroup, Standard Chartered as joint manager for $2.868bn Eurobond

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Separate $82.5 million to be raised to refinance previous bond
Senators want government to quickly proceed with issuance

The Federal Executive Council (FEC) has approved six transaction parties to advise it on the issuance of $2.868 billion in Eurobonds. The FEC approved the appointment of Citigroup Global Market Limited, Standard Chartered Bank as joint manager; FSDH Merchant Bank Limited as financial adviser; White And Case LLP, Banwo and Ighodalo as legal adviser.

The proposed external borrowing is mainly to fund part of the 2018 budget signed into law in June 2018 by the President.

The government appointed Citigroup Inc. and Standard Chartered Plc to jointly manage the transaction, Finance Minister Zainab Ahmed told reporters. FSDH Merchant Bank is the financial adviser, she said.

The upper legislative chamber also approved the request by the executive to borrow $82.54 million from external institutions to refinance the balance of $500 million matured Eurobond in the international capital market.

Last week, Mr Buhari, in a letter to the National Assembly, had requested the resolutions of the parliament to approve the borrowing.

Buhari in June signed this year’s 9.1 trillion-naira ($25 billion) budget, the country’s biggest yet, which increases investment in roads, rail, ports and power to boost the economy. The International Monetary Fund forecast the economy of Africa’s largest oil producer will expand 1.9 percent this year following a contraction in 2016.

“The market is receptive to issuance from oil credits. With the exception of the ruble, which has had some political challenges this year, oil currencies have held up really well in 2018,” Kieran Curtis, fund manager at Aberdeen Standard Investments, said by phone. “Not to say that asset prices are totally immune from pressures. Spreads will be wider I suspect from the last issue Nigeria did, but the market conditions haven’t been as unhelpful for Nigeria as they have been for some of the other headline grabbing places.”

Some of Nigeria’s Eurobonds reversed their gains after the announcement. Yields on the $1.25 billion of notes maturing in February 2038 rose 5 basis points to 8.36 percent by 3:52 p.m. in London, having earlier been as low as 8.29 percent.

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