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Managers for FG’s $1bn Eurobond rush to beat deadline

There are indications that interested Deposit Money Banks (DMBs) and international banks are racing to beat the deadline for submission of bids to be appointed as financial advisers and managers to the Federal  Government in its planned $1 billion Eurobond raising from International Capital Market.

The Federal Government last month set machinery in motion to raise $1 billion from International Capital Market in 2016.

The Debt Management Office (DMO) is seeking to appoint two international banks as joint lead managers and a local bank as financial adviser for the whole programme and has set noon on September 19 as deadline for submission of bids in Abuja.

Industry sources said the DMO has foreclosed any possibility of extending the deadline.

The debt office had in a statement on its website said it is seeking two lead managers and a financial adviser to organise the issuance of $1 billion Eurobonds this year.

The $1billion sale is the first tranche of a $4.5 billion Nigeria Global Medium-Term Notes Issuance Programme that runs through 2018, it said.

The move, the statement said, is to “enable Nigeria to have the flexibility of quickly taking advantage of favourable market conditions in the international capital market to raise funds if and only when the need arises.”

The statement by DMO reads in part “The Federal Republic of Nigeria (FRN) is in the process of establishing a $4.50 billion Federal Government Medium Term Note (FGMTN) programme, 2016-2018, out of which it intends to issue $1.00 billion Eurobond in the year 2016.

“The purpose of establishing the FGMTN programme is to enable the FRN have the flexibility of quickly taking advantage of favourable market conditions in the International Capital Market (ICM) to raise funds, if and only when the need arises.”

In view of the foregoing, the Debt Management Office disclosed that it wishes to appoint: “two international banks as Joint Lead Managers; and, one local bank as Financial Adviser for the planned FGMTN programme and the issuance of $1.00 billion out of the $4.50 billion FGMTN programme in 2016. The parties will be appointed separately by the FRN, but will be required to work together to ensure a successful transaction.

According to the debt office, “The Joint Lead Managers and the Local Financial Adviser shall be expected to render the following services: Assist the DMO with the determination of the features of the FGMTN, 2016-2018 programme’s requirements for listing of the FGMTN, particularly in relation to subscription and settlement to ensure its acceptance by the target investors; work with legal counsels and the DMO to ensure the FG MTN programme complies with relevant legal and regulatory requirements in their respective jurisdictions; advise the DMO of the appropriate strategy for the FGMTN programme and the issuance processes and procedures for securities offerings under the programme; and work with legal counsel and the DMO in connection with the preparation of the Programme/Dealer Agreement and any other documents that are related to the offering of securities under the FGMTN.”

Such advisers, it said, are to collaborate with the DMO and other transaction parties in the preparation of the Base Prospectus and other documents required to execute the FGMTN, as well as, any other documents to be submitted to relevant regulators in the United States of America, the United Kingdom and other jurisdictions as may be required.

The Eurobond sales this year would be the first since Nigeria tapped the market in July 2013 and an inaugural issue in 2011.