FG Debunks Claim On Issuing Eurobonds In 2019

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The Debt Management Office (DMO) has refuted claims that the Federal Government (FG) has no plan to issue Eurobonds as part of its external borrowing in 2019.

In a statement on Wednesday,  DMO stated that FG will continue to focus on its objective of reducing debt service costs by emphasising borrowing from concessional sources while considering Eurobonds and other commercial sources as secondary options.

The office noted that the misrepresentation arose during the Islamic Finance News Nigeria forum which was held in Lagos on June 18, 2019, where the director-general was responding to a question on the likelihood for the FG to issue a US Dollar denominated Sukuk in 2019, given the processes involved in the Sukuk issuance.

“For the records, the 2019 Appropriation Act provides for new external borrowing of N824.82 billion (equivalent of USD2.7 billion at USD/N305).

“Consistent with the debt management strategy of reducing debt service cost, the plan for raising the new external borrowing is to first access cheaper funding from multilateral and bilateral lenders as may be available. Thereafter, any balance will be raised from commercial sources which may include securities issuance such as Eurobonds in the international capital market,” the statement said.

Meanwhile, the Federal Government is offering N100bn worth of bonds for subscription by June 26, 2019.

The DMO stated this in a circular published on its website on Tuesday.

The circular showed a N30bn five-year reopening bond, offered at 12.75 percent,  expected to mature in April 2023.

The circular also showed another N40bn 10-year reopening bond that would mature in April 2029 offered at 14.55 percent and another N30bn 30-year bond that is expected to mature in April 2049 offered at 14.8 percent.

The auction date stated on the circular is June 26, 2019 while the settlement date is June 28, 2019.

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