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Thursday, February 27, 2020

FG appoints StanbicIBTC, Citi bank, others to handle $2.5 billion Eurobond

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The Buhari administration Wednesday announced the reappointment of a consortium of banks including Citi Group,  Standard Chartered, StanbicIBTC, Whitten-Case and African Practice to handle the $2.5 billion Eurobond.

Minister of Finance, Kemi Adeosun, made the disclosure at the end of the Federal Executive Council meeting presided over by President Muhammadu Buhari,

The Minister while speaking on the impact  of the use of the Proceeds of the $500 million issued in November 2017, disclosed that the proceeds about N162.50 billion were used to redeem Nigerian Treasury Bills (NTBs) which matured in December 2017.

“The immediate impact was a significant drop in the Bid Rates at the Auctions of both NTBs and FGN Bonds. In December 2017 and January 2018″

The NTBs, she disclosed dropped from about 16% to 13%, while the Bonds dropped from about 16-16.50% to 13.50%

According to her ” translates to savings for Government on new borrowing while also making the cost of borrowing for the real sector cheaper since the sovereign rate serves as a benchmark for other borrowers

This is just as government announced potential Savings on the proposed $2.5 billion Refinancing, estimated at N64b per annum

“The estimated proceeds of the N762.5 billion will be used to redeem NTBs.

“At estimated current NTB rates of 15% (following mop-up operations by the CBN), the savings from the refinancing of N762.5 billion of Domestic Debt using external capital raising is about  N64 billion per annum”

 

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