FEC approves executors for $1bn Euro bond

The Federal Executive Council (FEC) has approved the appointments of transaction parties to execute the issuance of the proposed $1 billion Euro bond at the international capital market.

According to the Minister of Finance, Mrs Kemi Adeosun, who disclosed this while briefing State House correspondents at the end of the Federal Executive Council (FEC) meeting Wednesday in Abuja, the transaction parties are Citigroup, Standard Chartered Bank, Stanbic IBTC, White & Case LLP, Banwo and Ighodalo and Africa Practice Communications.

She explained that the parties would also run any Eurobond issuance programme by the Federal Government for the next three years.

She stated: “My memo, which was approved by council, was for the appointment of transaction parties for the $1 billion Eurobond issue”.

She explained that the programme is part of the funding for 2016 budget to commence in January.

She added:“We obtained certificate of no objection from Bureau for Public Procurement (BPP) for the appointment of those parties having undertaken fully competitive open tender process.

“We are confident that we will be able to complete the transaction expediently with significant interest . The oil price stability obviously is helping us , currently there is quite a bit of demand for emerging markets papers . Nigeria’s paper is currently trading around 7 to 8 per cent mark. We are expecting to get quite a competitive pricing on the issuance programme which I said is to be used for the purpose of funding capital projects in the 2016 budget within the month of January.

“Angola came out in November with bench mark  $I.56 and Gabon in June  did $8.25 plus Ghana in September did $9.25. So we’re expecting to get quite a competitive pricing on the issuance programme which as I said is to be used for the purposes of funding capital projects  as part of the 2016 budget within the month of January.

“The other thing to note is that these parties that have been appointed will run any euro bond issuance programme that we do for the next three years. So we don’t have to keep on re-tendering. Unless there is a major problem with any of them they would be our parties for the next three years.”

Recall that to make up for shortfall in the N6.06 trillion 2016 budget, the Federal Government began the process of appointing banks for the sale of the Eurobond last September and had said it wanted to issue the bond by the end of the year.

The Eurobond is in addition to getting concessionary loans from the World Bank and China as oil revenues dropped, but only the African Development Bank (AfDB) approved a $600 million loan, the first tranche of $1 billion total package.

Vice President, Yemi Osinbajo had in media interview last month said that Nigeria was looking at concluding the sale of $1 billion Eurobond by the end of the first quarter of 2017 and will seek to make its foreign exchange market more flexible.

Nigeria has sold dollar bonds twice, the last time in mid-2013, when it raised $1 billion of five- and 10-year debt. Adeosun who briefed trporters alongside the Minister of Information, Culture and Tourism, Lai Mohammed and the Minister of Environment, Amina Mohammed, said the Council approved the appointment.

The Environment minister on her part said the council approved  the final amendment to the gazette of the establishment of the hydrocarbon pollution restoration process/purchase.

It is a vehicle that would  have all the government structures to allow it carry out  the clean up in the Niger Delta beginning with Ogoni land and the implementation  of the UNEP report.

Mohammed said, “Why is this so important?  Well, what we have in the past gazette did not put in palce some of the government structures we need such as the government board, like the board of trustees or a structure that would be held accountable for the enormous amount of money that is already available to spend but additional moneies that we can leverage from the money that we have that is being offered by different partners  to come into cleaning up and then dealing  with the livelihoods after.

‎“To begin with the building of the centre of excellence, the integrated soil treatment centre will also go up and then we begin training but in this case we start training many of the women on the livelihood side in the  contaminated areas.”