The Debt Management Office (DMO) yesterday said it will appoint two international banks as joint lead managers, and a local lender as financial adviser for the federal government’s proposed issuance of $1 billion Eurobonds this year.
The Eurobond sales this year is the first tranche of a $4.5 billion Nigeria Global Medium-Term Notes Issuance Programme that runs through 2018. It is also the first since Nigeria tapped the market in July 2013, and an inaugural issue in 2011.
According to the DMO, the sale will “enable Nigeria to have the flexibility of quickly taking advantage of favourable market conditions in the international capital market to raise funds if and only when the need arises.”
Bond advisers provide unbiased research reports on the broadest range of bonds and fixed income securities. They critically assess each security and provide an investment recommendation for their clients to choose the best investments.
The DMO said it had called for bids from prospective managers and local lenders for participation in the project and that the bids would be opened in Abuja, on September 19.
It also stated that the joint legal advisers in the project are expected to render services including: provide legal advice to the DMO in all areas as may be required, including all relevant documentation required for the establishment of Federal Government Medium Term Note (FGMTN); review all relevant Nigerian laws and regulations and the laws and regulations of other jurisdictions, to ensure full compliance with such laws and regulations in the packaging, execution and documentation of the FGMTN.
It also stated that the scope of work of the advisers will include: the review of the mandate or engagement letters for the other transaction parties in compliance with relevant laws and market practices, and any other agreement or contract that may be required for the successful execution of the FGMTN.
Requirements for the technical and financial bids according to the DMO include, evidence of registration with relevant regulatory authorities in the domestic capital market (for Nigerian law firms) and international capital market (for international law firms), particularly in the United Kingdom and the United States of America.
LEADERSHIP recalls that President Muhammadu Buhari earlier this year, assented to a record N6.1 trillion budget for the 2016 fiscal year. The treasury intends to borrow to plug the budget’s N2.2 trillion deficit. The government is increasing spending to stimulate Nigeria’s economy after it contracted by 0.4 per cent in the first quarter as revenue dwindled amid lower oil prices and a decline in output.
The International Monetary Fund had projected that the nation’s economy could shrink by 1.8 percent in 2016.