Senate Approves $2.78 bln Eurobond Issue for President Buhari

Nigeria's Senate has approved President Muhammadu Buhari's request to raised $2.78 billion in Eurobond to fund part of this year's budget deficit, however, counsel the government on the need to exercise restraint on excessive external borrowing.
Lawmakers said the new bond issue will raise foreign borrowing to 32 percent of Nigeria’s total debt from 30 percent at June 2018.

The Senate said it approved the issuance but warned against accumulating too much foreign debt. “The federal government should do everything possible to reduce or limit its request for more external borrowing and (seek) other means of generating revenue internally,” it said. 

“This is to avoid a cleverly managed re-conquest of our country through a debt overhang.”

On Wednesday, the government also approved Citigroup, Standard Chartered Bank and local firm FSDH Merchant Bank as financial advisers on the planned bond issue, Finance Minister Zainab Ahmed told reporters.

Nigeria, which emerged from recession last year, approved a three-year plan in 2016 to borrow more from abroad. It wants 40 percent of its loans to come from offshore to lower borrowing costs and help to fund its record-high budgets.
President Muhammadu Buhari, who will seek a second term in a presidential election to be held in February, signed a record 9.12 trillion-naira budget for 2018 into law in June as part of an attempt to foster economic growth.
Lawmakers also approved debt issuance of $82.54 million to refinance the balance of a $500 million matured Eurobond.
Nigerian government officials have met fund managers on a non-deal roadshow in New York held to update bondholders on the country’s growth plan following the recession, an investor presentation seen by Reuters showed.