FG appoints consortium of banks to handle $2.5b Eurobond

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.

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 .

Speaking on the impact  of the use of proceeds of the USD500 million issued in November 2017, disclosed that of the proceeds, about N162.50 billion was used to redeem Nigerian Treasury Bills (NTBs) which matured in December 2017.

” The immediate impact was a significant drop in the Bid Rates at the Auctions of both NTBs and FGN Bonds in December 2017 and January 2018″

The NTBs, she disclosed, dropped from about 16% to 13%, while the Bonds dropped from about 16-16.50% to 13.50%

She said 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.

This is just as government announced potential savings on the proposed USD2.5 billion refinancing, estimated at N64bn per annum

“The estimated proceeds of the N762.5 billion will be used to redeem NTBs.

“At estimated current NTB rates of 15% (following mop-up operations by the CBN), the savings from the refinancing of N762.5 billion of Domestic Debt using external capital raising is about  N64 billion per annum.”