Nigeria Appoints JP Morgan, Goldman Sachs as Managers for Next Eurobonds

Nigeria’s Debt Management Office (DMO) has approved eight transaction institutions to advise the country on its next Eurobonds issuance in a bid to finance the 2021 budget deficit.

The debt office stated that 38 institutions responded to the expression of interest, of which after a rigorous evaluation to ascertain the technical capacities of the bidders, only the eight institutions selected were qualified.

According to the statement, JP Morgan, Citigroup, Standard Chartered Bank and Goldman Sachs were approved as international bookrunners/joint lead managers.

Chapel Hill Denham was appointed as the Nigerian bookrunner; FSDH Merchant Bank as the financial adviser; White & Case LLP and Banwo & Ighodalo as the international and Nigerian legal advisers respectively.

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This was disclosed in a statement by the MDO. They had announced in April that plans are ongoing towards the issuance of Eurobonds and its plans to appoint transaction advisers through an open bid process.

It said the Eurobonds will be used as one of the tools for raising N2.343 trillion (about USD6.2 billion) debt to cover the 2021 Appropriation Act deficit.

“Whilst the Government expects a successful outing, it will be mindful of costs and risks (in terms of tenor and pricing) in determining the amount of Eurobonds to issue,” the debt office said.

According to the statement, since the Eurobonds are being issued to partly finance the 2021 budget deficit, the proceeds will be used to fund various projects in the budget.

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“In addition, the proceeds will result in an inflow of foreign exchange which in turn, will increase Nigeria’s External Reserves and support the Naira Exchange Rate,” it said.

The DMO held its last Eurobonds sale in 2018 (its sixth sale) during which it raised $2.86 billion and issued a record $10.7 billion of international bonds in the same year.

In 2020, the debt office planned to select advisers for a $3.3 billion Eurobonds issued through an open competitive bid process, but the sale was deferred due to the economic downturn caused by the COVID-19 pandemic.

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