The Federal Government has announced the appointment of a consortium of banks including Citi Group, Standard Chartered, StanbicIBTC, Whitten-Case and African Practice to handle the $2.5b Eurobond. The Federal Executive Council has approved the reappointment of transaction parties for the country’s Eurobond.
Minister of Finance, Kemi Adeosun disclosed this Wednesday while briefing State House Correspondents on the USD2.5 billion External Borrowing for refinancing after the weekly Federal Executive Council meeting presided over by President Muhammadu Buhari.
“I presented a memo which was approved, to reappoint transaction parties that are active for us on our Eurobond, and those parties are city group, Standard Chartered, Stanbic IBTC holdings, White & Case, Banwo & Ighodalo and Africa Practice. This is for our Eurobond issuance, $2.5 billion for refinancing. This is not re-borrowing, it is for the Nigerian government treasury bills that will mature and we will then refinance into dollars,” the Finance Minister explained.
She said the Eurobond which started last year has had a significant impact on the country’s cost of borrowing and the market itself.
“The immediate impact was a significant drop in the Bid Rates at the Auctions of both Nigeria Treasury Bills NTBs and the Federal Government bonds. In December 2017 and January 2018. The treasury bills rate dropped at that time from 16% to 13%. The proceeds about N162.50 billion were used to redeem Nigerian Treasury Bills (NTBs) which matured in December 2017.
This translates to savings for Government on new borrowing while also making the cost of borrowing for the real sector cheaper since the sovereign rate serves as a benchmark for other borrowers. The estimated proceeds of the N762.5 billion will be used to redeem NTBs,” she said.
