The Nation Newspaper

Tag: Eurobond

  • Nigeria ‘may pay’ 6% yield for Eurobond

    Nigeria ‘may pay’ 6% yield for Eurobond

    Nigeria will likely have to pay around six percent for a 10-year maturity on its $1 billion Eurobond if it goes ahead with the issue after a debt meeting with investors next week, an analyst and a fund manager have said.

    Senior Nigerian government officials led by Finance Minister Ngozi Okonjo-Iweala started a one-week roadshow to Britain, Germany and the United States on Wednesday with book-runners for the Eurobond, with a view to issuing it this year.

    The timing of the bond and its maturity have not been decided yet and will depend on the market, a London-based fund manager who attended the roadshow told Reuters, asking not to be named.

    Nigeria’s debt office had said it wanted to sell the bond by end-September and that it was increasing the amount it borrows overseas to lower funding costs.

    Deutsche Bank and Citigroup are acting as book-runners for the Eurobond.

    “If they went for a 10-year they could get one in the region of six percent,” said the fund manager, adding that Nigeria may hold back on the sale to minimise the yield.

    Yields on emerging market debt have risen sharply over the past six weeks owing to lingering concerns that major central banks may start to back off loose monetary policies that kept global markets awash with cash.

    Yields on Nigeria’s 10-year domestic bond spiked nearly three percent this month while stocks and the naira tumbled last week, as foreign investors dumped frontier market assets.

     

     

  • Fed Govt appoints Citi, Deutsche for $1 Eurobond

    The Federal Government has appointed Citi Bank and Deutsche Bank to manage a $1 billion planned Eurobond, the head of the debt management office (DMO) told Reuters last Friday.

    “The Federal Executive Council approved the appointment of Citi and Deutsche as joint book-runners for the planned $1 billion Eurobond,” DMO Abraham Nwankwo said.

    Minister of Finance and Coordinating Minster of the Economy Dr. Ngozi Okonjo-Iweala, had said at the recently concluded World Bank/International Monetary Fund (IMF) Meetings in Washington D.C, United States, that the Eurobond will be used to finance the power sector and gas development.

    The Minister said the Federal Government will float a Eurobond before the end of this year, stressing that a time table has been put together.

    The minister said: “The Ministry of Finance will undertake road shows in Europe and America to attract investors to subscribe to the bond. This will be our second Eurobond on offer, the yields on Nigeria bonds are good, this is an auspicious time for us to go and launch the Eurobond and so we are continuing.”

  • Fidelity Bank issues $300m five-year Eurobond

    Fidelity Bank Plc has under taken a Eurobond issue to raise $300 million from the international market.

    A Eurobond issue is a debt instrument to raise money in foreign currency for strategic purposes and for a specified length of time, at a stated fixed cost.

    In a statement, the bank said the Eurobond is for a five-year period, at a coupon rate of 6.875 per cent, adding that it is efficient and enjoys efficient pricing. The Fidelity Issue was jointly managed by two leading international banks, Deutsche Bank and Citibank.

    The lender disclosed that the international market was obviously impressed its fundamentals, especially its Capital Adequacy Ratio (CAR), which was 29 per cent by December, 2012, compared to the regulatory base of 10 per cent. The bank also enjoys a strong Liquidity Ratio, which, at 47 per cent, is much higher than the regulatory base of 30 per cent, the statement said.

    Managing Director, Fidelity Bank Plc, Mr. Reginald Ihejiahi said the proceeds of the Eurobond will further enhance the capacity of the bank to support the critical sectors of the economy and meet the growing foreign currency needs of her clientele in oil & gas, power, infrastructure and manufacturing.

    The bank said availability of the bond proceeds necessarily stabilizes is dollar balance sheet, eases the pressure arising from demands from customers for tenured loans and enables the bank to target viable dollar-dominated transactions.