Updated: FG appoints advisors for $1bn Euro bond

The Federal Government on Wednesday said its planned $1billion Euro bond is already getting “significant interest” from investors as issuance commences in January 2017 after the cabinet approved five transaction advisers.

Citi Group, Standard Chartered, Stanbic IBTC, White & Case, Banwo and Ighodalo, Africa Practices were approved as community advisers for the euro bond, which the government said it expects to get competitive pricing.

The appointed advisers are expected to run issuance programmes for the next three years to avoid the cumbersome process of re-tendering and selection, Minister of Finance, Kemi Adeosun said while briefing newsmen after the weekly Federal Executive Council meeting.

The $1 billion eurobond is part of the funding for capital projects in the 2016 budget which runs till March 2017. “My memo which was approved by council was for the appointment of transaction parties for the $1billion Eurobond issue.

“The one billion Eurobond program is part of the funding for 2016 budget and we hope to be able to commence the process in January .

“We are confident that we will be able to complete the transaction expediently with significant interest . The oil price stability
obviously is helping us , currently there is quite a bit of demand for emerging markets papers . Nigeria’s paper is currently trading around 7 to 8 percent mark . We are expecting to get quite a competitive pricing on the issuance program which I said is to be used for the purpose of funding capital projects in the 2016 budget within the month of January” Adeosun said.

Adeosun who briefed alongside the Ministers of Environment, Amina Mohammed and Information, Lai Mohammed, further explained that the five parties that have been appointed “would run any Eurobond issuance program that we do for the next three years so that we don’t have to keep on re-tendering unless there is a major problem with any of them they will be our parties for the next three years”.

She said the process that produced the five parties was competitive after which certificate of no objection was obtained from the Bureau for Public Procurement (BPP) for their appointment

The Nigerian Government in September announced plans to raise $1 billion on the Eurobond market, a move, it said was targeted at plugging the budget deficit. The bonds, according to Minister Adeosun who first disclosed the planned issuance at a press briefing were expected to go on sale in December with the proceeds channelled into capital projects.

Nigeria’s N6.1 trillion ($19.4-billion) spending plan for 2016 which the President said is targeted at stimulating economic growth in the country has a N2.2 trillion deficit.

Analysts say that an inflow of $1 billion would water the country’s otherwise dry foreign exchange market and help the government execute its record spending plans.
The $1 billion Eurobond is the first tranche of a $4.5 billion debt programme to run through 2018.  FEC also approved an amendment to the gazette of the establishment of the Hydrocarbon Pollution Restoration Project(HYPREP).

The HYPREP houses all the government structures that will allow for the clean up in the Niger Delta, which is starting with  Ogoni land and the implementation of the UNEP report, Environment minister said.

She explained that the amendment of the gazette was imperative as the past one “did not put in place some of the government structures we need such as the government board, like the board of trustees or a structure that would be held accountable for not only the enormous amount of money that is already available to spend but additional monies that we can leverage from the money that we have that is being offered by different partners  to come into cleaning up and then dealing with the livelihoods after”.

The amendment will enable government put more structure to the board of trustees who require a legal entity to put the  resources in as the clean up takes off next year.

Mohammed said the clean up process will begin with the building of the centre of excellence. The integrated soil treatment centre will also go up alongside trainings, especially of women, to ensure they have an alternative livelihood in the contaminated areas.

So we have to find better ways of speaking with communities but also ensuring that the livelihood of women is not affected.  We are also speaking to many of the young people there to ensure we have good feedback from those who are interested in being  part of the rollout of the clean up Ogoni land programme in the new year, she said.

 

 

Elizabeth Archibong