The Federal Government has concluded plans to issue Eurobonds for 2021 and is going to pick advisers to the transaction through an open bid process.
The amount to be raised is expected to be within the external borrowing plans for 2021. The Federal Government in 2021 plans to raise $6.14 billion (N2.34 trillion) from foreign sources.
This disclosure was made by the Director-General of the Debt Management Office (DMO), Patience Oniha, during a chat with Reuters on Wednesday, April 7, 2021.
The Federal Government, who had earlier planned a Eurobond issue early last year after its sixth sale in 2018 where it raised $2.86 billion, deferred such plans due to the disruptions caused by the outbreak of the coronavirus pandemic.
The DMO boss at an investors conference with the Federal Government put together by Citibank, last year, said that the Federal Government had no plans to source debt from Eurobond in 2020 as it is going to shift its focus to domestic borrowing and sourcing from concessionary sources.
Earlier this year, Nigeria reduced its external borrowings in a new debt strategy after it redeemed its 6.75% $500 million Eurobond in January with Oniha saying that the DMO was monitoring international markets for new issues by frontier countries.
What you should know
- Ghana had some time last week raised $3 billion from Eurobonds, a year after the outbreak of the coronavirus pandemic, which disrupted economic activities globally.
- This will be a huge boost for Nigeria especially at a time the Federal Government is still struggling to get approval for the $1.5 billion loan from the World Bank due to issues on currency reforms.
- The Institute of International Finance had said it expected African governments to return to capital markets this year to sell bonds as investors embrace more risk.
DMO reveals what infrastructure Sukuk Fund is financing
The Debt Management Office revealed that Sukuk funding is currently rehabilitating the Outer Marina Road in Lagos.
The Debt Management Office revealed that Sukuk funding is currently rehabilitating the Outer Marina Road which is a major road connecting Lagos Island to Victoria Island, Falomo and Ikoyi.
The DMO disclosed this in a statement on Wednesday evening.
“While the Outer Marina Road is a major artery on its own, It will also be instrumental to easing the traffic in Lagos during the repair of Falomo Bridge. Thanks to the SUKUK, we are able to rebuild Nigeria one infrastructure at a time,” it said.
— DMO Nigeria (@DMONigeria) April 7, 2021
What you should know
The Debt Management Office (DMO) announced last month that it listed its third sovereign Sukuk, N162.557bn 7-year 11.200% AL Ijarah Sovereign Sukuk due 2027, on the Nigerian Stock Exchange and the FMDQ Securities Exchange.
DMO announces April 2021 FGN Savings Bond offer for subscription
The DMO, on behalf of the Federal Government of Nigeria, has offered for subscription, the April 2021 FGN Savings Bond.
The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria has offered for subscription, the April 2021 Federal Government of Nigeria Savings Bond.
This is contained in a notification seen by Nairametrics on the website of the DMO on Monday. According to the notification, the savings bond offer comes in two tranches:
- 2-Year FGN Savings Bond due April 14, 2023: 5.522% per annum
- 3-year FGN Savings Bond due April 14, 2024: 6.522% per annum
- Opening Date: April 6, 2021
- Closing Date: April 9, 2021
- Settlement Date: April 14, 2021
- Coupon Payment Dates: July 14, October 14, January 14, and April 14
- Units of sale: N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
According to the circular, the offer is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.
Interested investors were however advised to visit their website in order to get the list of stockbroking firms appointed as distribution agents.
What you should know
- Nairametrics had reported the offer for subscription of a similar Savings Bond in March 2021 with interest rates of 5.181% and 6.181% per annum for 2 years and 3 years tenor respectively.
- The interest rate for the latest offer is higher than the offer announced in the previous month. This could be a move to attract more investors to subscribe to the securities.
- This is evidently seen in the equities market as investors sell-off their shares in order to buy into less risky assets, amid high bond yields.
- The FGN Savings Bond is an investment product issued through the Debt Management Office (DMO) on behalf of the Federal Government.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Friesland Campina Wamco Nigeria Plc announces AGM, proposes dividend of N6.74 per share.
- ETI appoints Akin Dada as Group Executive, Corporate & Investment banking.
- Union Homes REIT proposes final dividend worth N465.03 million for shareholders.
- GT Bank Plc holds FY 2020 investors presentation.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.