Preparations for Nigeria’s planned Eurobond issuance and the consideration of the partners to the deal including Chapel Hill Denham, began early last year when it was thought the market could open for African countries sometimes in 2024, according to investigation by BusinessDay.
There had been no external borrowing in 2023 because of the not so favourable conditions and officials of the Debt Management Office who watch the international currency markets closely, began to consider the idea of a Eurobond before the transition in May last year and the plan was to go for a quick turn around, using the same parties for the 2022 issuance, our reporter learnt.
According to our investigation, in August 2021 after an open competitive bidding process, the Bureau of Public Procurement (BPP) and Federal Executive Council (FEC) approved the appointment of the following institutions as Transaction Advisers for Nigeria’s Eurobond Issuance.
The international Issuing Houses approved are Citi, J P Morgan, Goldman Sachs and Standard Chartered Bank while Chapel Hill Denham was chosen as the local issuing house and Banwo & Ighodalo as the local legal advisers. The foreign legal advisers were the firm of White & Case.
The appointment of the parties was for a period of two years. With these parties, Nigeria raised USD4bn Eurobonds in Sept 2021 and another USD1.25bn in March 2022.
According to a senior official in the DMO, “in Q3 2023, when there were indications that the ICM may open to emerging and frontier economies like Nigeria, given that there been no external borrowing in the 2023 Budget, the DMO considered it expedient for Nigeria to be ready to access the market once it opens, moreso when there was no assurance of how long the bond market will remain open.
“Consequently, the DMO approached the Bureau of Public Procurement, BPP with a formal request on August 29, 2023 for approval to adopt the repeat procurement process with the same parties approved in 2021 in order to shorten the procurement process. Our initial approach to the BPP was prior to the appointment of Ministers.
“The next stage in the process is to obtain FEC’s approval. No memo for this purpose has been submitted to FEC. It is important to state that given the procurement threshold FEC approval is required.”
Nigeria has a history of using a repeat procurement in the past, BusinessDay investigation found. In 2013, during the administration of President Goodluck Jonathan, the repeat procurement principle was adopted for the Issuance of a dual-tranche USD1bn Eurobonds, BusinessDay learnt.
Officials disclosed to BusinessDay that the matter of applying for the approval of the parties was not discussed with Wale Edun when he became Finance Minister. However, when the minister learnt that Chapel Hill was being considered, the minister balked at the idea.
“He told us in unequivocal terms that although he had resigned from the board of the firm, he was still a shareholder. His resistance to the idea was made clear to all,” an official of DMO told a BusinessDay reporter.
It was on account of this that an official correspondence was entered into with the Corporate Affairs Commission by DMO which required proper guidance to ascertain the true relationship the minister has with the issuing house before sending a request to the Federal Executive Council. This never happened.
Chapel Hill Denham which has Bolaji Balogun as its CEO, is a leading independent investment banking, securities trading, and investment management firm with head office in Ikoyi, Lagos. On its website, the firm calls itself, “Nigeria’s most trusted advisor, focused on providing unbiased advisory, execution, and investment services to corporations, governments, institutions, and individuals involved in investing in and developing Nigeria and Africa.”
Chapel Hill Denham won the Euromoney awards for Nigeria’s best investment bank in 2012, 2013, 2015, 2016, 2017, 2019, 2022 and 2023 when it also won the Global Finance award for best investment bank in Nigeria. The firm has also been given separate awards for its work in the Sukuk deal of 2022.
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