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.

​

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.

​

“Whilst the approval process ... is expected to be completed soon, transaction advisers ... will be through an open competitive bidding process,” the DMO said.

​

Citigroup, Standard Chartered Bank and local firm FSDH Merchant Bank acted as financial advisers on the last Eurobond sale.

​

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.

​

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.

​

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.

​

The DMO says Nigeria is mindful of rising debt cost.

​

“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.