The Federal Government on.Wednesday advanced its plans towards its Eurobond Issuance in the International Capital Market (ICM) with the appointment of the Transaction Advisers.
Typical of the Eurobond Issuance exercise, the Debt Management Office (DMO) the Transaction Advisers are of various categories required to work with the Federal Government to ensure the success of the transaction.
The institutions approved by the Executive Council of the Federation (FEC) at its meeting on Wednesday to advise on the Eurobond Issuance include JP Morgan, Citigroup Global Markets Limited, Joint Lead Managers Standard Chartered Bank and Goldman Sachs for the International Book runners category, and Chapel Hill Denham Advisory Services Limited, for the Nigerian Bookrunner category.
The others are FSDH Merchant Bank Limited as Financial Adviser; White & Case LLP as International Legal Adviser, and Banwo & Ighodalo, as the Nigerian Legal Adviser to the transaction.
The DMO said the Transaction Advisers emerged from an Open Competitive Bidding Process as outlined in the Public Procurement Act, 2007 (as amended).
A total of 38 institutions responded to the Expression of Interest request for application, and evaluation of the applications to ascertain their technical capacities to execute the transactions.
At the end of the evaluation exercise, the eight institutions were selected and approved by the FEC at its meeting on Wednesday.
With the approval of the Transaction Advisers, the DMO said it would now accelerate activities towards the Issuance of the Eurobonds.
Approval for the issuance of the Eurobond was given through the Resolutions of the Senate and the House of Representatives, in compliance with the Debt Management Office (Establishment, Etc.) Act, 2003 and Fiscal Responsibility Act, 2003.
The Federal Government has already outlined the purpose for which the funding to be raised from the Eurobonds issue would be deployed.
They include funding for the New External Borrowing of N2.343 trillion (about $6.2 billion) provided in the 2021 Appropriation Act to part finance the Deficit.
Also, the Government expects a successful outing from the issue would be mindful of costs and risks (in terms of tenor and pricing) in determining the amount of Eurobonds to issue.
Since the Eurobonds are being issued to part finance the 2021 Budget Deficit, the DMO said the proceeds would be used to fund various projects approved by the National Assembly in the Budget.
In addition, the debt management agency said the proceeds would result in an inflow of foreign exchange which would in turn increase Nigeria’s External Reserves and support the Naira Exchange Rate stabilization policy by the Central Bank of Nigeria.
Besides, the government’s ability to to execute most of infrastructure development programmes would enhance the capacity of the economy to continue to recover from the pangs of the devastation by the COVID-19 pandemic.