NIGERIA’S federal government has appointed several financial companies as its transaction advisers to including JP Morgan to help facilitate the issuance of Eurobonds in the international capital market.
Part of a plan to increase liquidity in the Nigerian economy and attract much-required capital for infrastructural investment, the bond issuance is part of a plan to boost economic diversification. According to the Debt Management Office (DMO), the bond issuance will help towards financing the 2021 Appropriation Act.
DMO spokesman Chinenye Onu, said: “Activities by Nigeria towards the issuance of Eurobonds in the international capital market inched forward today with the appointment of transaction advisers by the federal government. Typical of Eurobond issuance, transaction advisers of various categories are required to work with an issuer, in this case Nigeria, to ensure the success of the transaction.”
Institutions approved to manage the transaction include JP Morgan, Citigroup Global Markets, Standard Chartered Bank, Goldman Sachs, Chapel Hill Denham Advisory Services, FSDH Merchant Bank, White & Case LLP and Banwo & Ighodalo. These transaction advisers were selected from an Open Competitive Bidding Process in line with the Public Procurement Act, 2007.
A total of 38 institutions responded to the expression of interest and after rigorous evaluation to ascertain the technical capacities of the responders to execute the transaction, the eight institutions above were selected. According to the DMO it will now speed up Eurobonds issuance activities based on the transaction advisers’ approval.
On the essence of issuing Eurobonds, the DMO added that it is to raise funds for new external borrowing of N2.34tn ($6.2bn) provided in the 2021 Appropriation Act to part finance the deficit. According to the DMO, the funds raised would be used to finance different projects in the budget, while boosting foreign exchange inflow, increasing Nigeria’s external reserves and supporting the naira exchange rate.