5 weeks to sale, Nigeria at last appoints managers for $1bn Eurobond

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Apparently worried by signs that most investors targeted by its $1 billion Eurobond sale are foot dragging, the Nigerian government has agreed to appoint Citigroup, Standard Chartered Bank and Stanbic IBTC Bank as managers of deals.

The sale, which started with a road show in August 2016, and billed to take off in January 2017, is said to have suffered some prejudice following failure of government to have appointed a trusted institution to serve as mangers of the process.

According to an insider, most investors targeted, wanted the country to give assurance that the funds would be strictly used for capital projects, which will see their purchase of the bond regarded as equity holding.

“In most developing economies, such bonds are tagged with investment portfolio, such that failure to redeem it at maturity can have the buyers take over ownership of the project on which the money is invested on”, said Dr. Solomon Emezon, a senior lecturer at the University of Lagos Business Administration Department.

He said the announcement on Wednesday by the Finance Minister, Kemi Adeosun, that the appointment of the managers of the bond had been approved by President Muhmmadu Buhari is coming rather late.

“This was supposed to have been the first step ever before the road show took place some months ago. After all, the essence of embarking on the road show was to create awareness and draw up support from would-be investors. Waiting till some people put the appointment as a precondition for participating in the purchase of the bond is not too good,” the academic further stated.

But Adeosun told newsmen that her ministry was awaiting cabinet approval of the appointment of both the managers and legal advisers for the issue, adding that there was no cause for alarm.

Hear Adeosun: “The $1 billion Eurobond programme is part of funding for 2016 budget and we hope to be able to commence the process in January.

“It is part of the need to find money to make up for shortfall in the 2016 budget, knowing that revenues from oil have gone down due to low global prices and militant attacks in the Niger Delta.”

Officials said 60 per cent success was being expected form the pricing and issuance of the bond programme before it could be tagged successful.

By Emma Eke…