Senate approves additional $500m Eurobond

The Senate has approved the request of the Presidency to raise additional $500 million Eurobond from the international capital market for the funding of the 2016 budget.
The Senate plenary presided over by the Deputy Senate President, Ike Ekweremadu, arrived at this decision on Wednesday after a thorough debate on the loan request.
Deputy Majority Leader, Bala Ibn Na’Allah, who moved the motion for the loan request to be approved, urged his colleagues to quickly consider and endorse the request because of its importance to the implementation of the 2016 budget. Senate Minority Leader, Godswill Akpabio seconded the motion.
The then Acting President Yemi Osinbajo in a letter dated February 22, 2017 which he wrote to the Senate, he sought the approval for the executive to float another $500 million Eurobond.
The request came just weeks after the Federal Government floated a $1 billion Eurobond.
Osinbajo said the government had taken advantage of the fact that the $1 billion bond was over-subscribed and was seizing the opportunity of the favourable market conditions to issue the new $500 millio Eurobond.
He recalled that the 2016 Appropriation Act had a deficit of N2.2 trillion and a borrowing window of N1.8 trillion adding that the terms and conditions of the Eurobond may only be determined at the point of issuance.
That letter from Osinbajo read thus: “Following the over-subscription of the recent USD 1 billion Eurobond issuance, we wish to take advantage of favourable market conditions to issue a Eurobond debt instrument of USD 500 million to fund the implementation of the 2016 budget, which is still ongoing.
“The Senate President may wish to note that in line with the requirement of securities issuances in the ICM, a specific resolution of the National Assembly, as a firm confirmation of the approval of the Legislature for the
“It is important to note that the previous issuances of USD 500 million, USD 1 billion (consisting of two tranches of USD 500 million) and USD1 billion in January 2011, July 2013 and February 2017, respectively, were issued at coupons of 6.75 percent, 5.125 percent, 6.375 percent and 7.875 percent based on the prevailing market conditions.
“The Debt Management Office and the Federal Government’s appointed Transaction parties to the issue are committed to working assiduously to secure the best terms and conditions for the Federal Republic of Nigeria”.
He also explained that the Federal Government planned to issue the Eurobond between February and March 2017, subject to market conditions, in order to meet Government approved capital expenditure funding plan.