Connect with us

Finance

FG meets investors over $6.2bn Eurobond issuance

Published

on

Eurobond

The federal government has disclosed plans for a eurobond issuance at the international capital market (ICM) to raise $6.2 billion for financing the 2021 budget. 

Techeconomy.ng understands that Eurobond issuances are debt instruments denominated in a different currency than the local one of the country where the bond is issued.

The Debt Management Office (DMO) in a statement on Thursday said the virtual meetings with investors (both local and foreign) will hold on September 17 and September 20, 2021.

Recall, the federal government had appointed eight transaction institutions to provide advice for a eurobond issuance which the debt office said was to raise funds for the new external borrowing of N2.343 trillion to part finance the deficit.

The DMO in the statement noted that this is the first time local investors will be included in the roadshows (global market) as the last time Nigeria accessed the ICM was November 2018.

According to it, “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 office, however, the issuance of eurobonds will benefit Nigeria in various ways including, leading to an increase in external reserves; “frees up space in the domestic market for the private sector and sub-national borrowers. In effect, it helps the sovereign not to crowd out other borrowers in the domestic market.

The DMO said: “The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector notably banks, to issue Eurobonds to raise capital in the ICM.

“By so doing, their capital base has been strengthened to provide banking services whilst also meeting regulatory requirements. Nigeria has a sovereign yield curve in the ICM, extending up to 30 years.

“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 capitalisation.”

The office also said the eurobond issuances that precede the pricing has provided Nigeria with a strong global platform and made available opportunities for investors in the country.

ALSO READ  #NFW2020: Zenith Bank CEO hints on factors responsible for naira devaluation
Advertisement
Click to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Advertisement
Advertisement
Advertisement
Advertisement

Facebook