Nigeria aims to issue $2.5billion Eurobond by mid-November
September 28, 2017 | 4:57 pm| | | Start Conversation
Nigeria hopes to issue a $2.5 billion Eurobond by mid-November, the head of the country’s debt agency said on Thursday, the latest in a series of debt sales as it seeks to fund a record budget for 2017.
The 7.44 trillion naira ($24.4 billion) budget is meant to fuel growth after the economy pulled out of its first downturn in a quarter of a century in the second quarter of 2017. The mid-November issue would complement the $1.5 billion raised in Eurobond sales in February and March.
In August, Nigeria’s finance minister said the country would seek to refinance $3 billion worth of treasury bills denominated in the local currency with dollar borrowing to lower costs and improve its debt position.
“We are already working with transaction advisers and by the middle of November we should have issued $2.5 billion either in Eurobonds or a combination of Eurobonds and Diaspora bond,” said Patience Oniha, the director-general of the Debt Management Office, at a conference in Lagos.
Parliament will need to approve the debt, Oniha said, adding that the borrowing is part of a total of $4 billion allotted in the 2017 budget.
“The domestic debt is high in terms of cost and interest rate. We want to use the external borrowing to lengthen the maturity profile of our borrowing. We have done 15-years (bonds) and were told that we can look at 20- or 30-year tenor. We reduced our interest cost by about 10 percent.”
Nigeria now has a treasury bill portfolio worth 3.7 trillion naira, Oniha added.
But one European fund manager questioned the size of Nigeria’s dollar debt, saying the country’s exports are not growing enough to bring in enough foreign currency to service the debt.
The planned new debt could be too much in too little time, the fund manager said on the sidelines of the conference, declining to be named so as not to affect their business.
Nigeria’s policymakers are also still debating the 2017 budget, despite it being signed into law in June.
On Tuesday, the upper house of parliament said it would invite the ministers of finance and the budget to speak on “inadequate releases” in the budget and “the need to expedite releases in order to stimulate the economy.”
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