Nigeria Plans $2.5 Billion Eurobond Sale in First Quarter
Nigeria selling dollar bonds to refinance local-currency debt
Nation seeks to return to JPMorgan’s local-currency bond index
Nigeria may sell $2.5 billion of Eurobonds in the first quarter to refinance domestic debt and wants to start talks with JPMorgan Chase & Co. about being reinstated in its local-currency emerging-market bond index, according to a government official.
The government also plans to begin talks with JPMorgan about being included in its government bond index for emerging markets, said Oniha. The nation’s naira securities were removed in 2015 because of foreign-currency shortages.
Here’s more from the interview:
- The government is looking to sell another sukuk — debt that complies with Shariah principles — after the 2018 budget is approved
- The securities are tied to specific projects, Oniha said
- Nigeria in September sold a seven-year sukuk of 100 billion naira ($278 million), and used the proceeds to fund development of 25 roads across the country
- Due to declining borrowing costs in Nigeria, corporate bond sales are expected, probably after the second quarter as the process of issuing improves, Oniha said
- “There is money on the table. Rates are lower. So let’s begin to work on encouraging corporate bonds,” she said
- “The main reason there aren’t many corporate bonds in Nigeria is because interest rates were too high,” she said
- Of the $3 billion raised in November’s Eurobond sale, $2.5 billion went to funding the 2017 budget, and $500 million to refinancing local debt
Finance Minister Kemi Adeosun said the government is focusing on improving its economy, and indexes will “naturally” return to Nigeria when they see adjustments in line with their requirements.
- “JPMorgan have their own framework of how they evaluate an economy, and when they are ready, when conditions are good, they will list Nigeria again,” Adeosun said in an interview in her office in Abuja
- “We should just move in our own direction. What we need to do is to re-position this economy,” she said
- “JPMorgan or any other index will come naturally. My focus really is on the recovery of the economy. They will come when the macro fundamentals are right. They left because the macro fundamentals were not right,” Adeosun said