Nigeria to pick advisers for $3.3 bln Eurobond via open bids -DMO

(Reuters) - Nigeria plans to appoint advisers for a $3.3 billion Eurobond issue through an open competitive bid process and expects to complete an approval process for the sale soon, the Debt Management Office (DMO) said on Friday.
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The new Eurobond will be used to partly fund the government’s 2020 budget deficit and refinance an existing $500 million eurobond due in January next year, the DMO said.
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“Whilst the approval process ... is expected to be completed soon, transaction advisers ... will be through an open competitive bidding process,” the DMO said.
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Citigroup, Standard Chartered Bank and local firm FSDH Merchant Bank acted as financial advisers on the last Eurobond sale.
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Nigeria has been considering a dollar bond issuance after staying away from the international debt market in 2019 due to time constraints before the end of its budget cycle.
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The West African country held its last Eurobond sale in 2018, its sixth outing, where it raised $2.86 billion.
Nigeria’s Eurobond plan comes after neighbouring Ghana sold a $3 billion Eurobond last week that was five times oversubscribed. Investors are seeking high-yielding debt despite the possible impact that the outbreak of coronavirus in China could have on its major trading partners in Africa.
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Nigeria has been borrowing to fund growth after a 2016 recession slashed income and weakened its currency. In December, ratings agency Moody’s downgraded Nigeria’s outlook to negative from stable, citing increased risk to government revenue.
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The DMO says Nigeria is mindful of rising debt cost.
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“The plan ... is to first maximize financing from relatively cheaper concessional sources where available, and the balance, if any, ... through the issuance of Eurobonds,” the DMO said.