Nigeria's Senate Approves $2.8 Billion Eurobond-Sale Request

(Bloomberg) -- Nigeria’s Senate approved President Muhammadu Buhari’s request to issue $2.8 billion of Eurobonds.

The proceeds will help to fund some infrastructure projects under this year’s spending plan, Senate President Bukola Saraki said during a plenary session Wednesday in the West African nation’s capital, Abuja. It also approved raising a separate $82.5 million to refinance the balance from a previous $500 million Eurobond that’s matured.

Senators urged the House of Representatives, Nigeria’s lower chamber of parliament, to quickly approve the debt too so that government can move to issue. The sale is expected “within the year,” said Patience Oniha, head of the nation’s Debt Management Office.

The government appointed Citigroup Inc. and Standard Chartered Plc to jointly manage the transaction, Finance Minister Zainab Ahmed told reporters. FSDH Merchant Bank is the financial adviser, she said.

Buhari in June signed this year’s 9.1 trillion-naira ($25 billion) budget, the country’s biggest yet, which increases investment in roads, rail, ports and power to boost the economy. The International Monetary Fund forecast the economy of Africa’s largest oil producer will expand 1.9 percent this year following a contraction in 2016.

“The market is receptive to issuance from oil credits. With the exception of the ruble, which has had some political challenges this year, oil currencies have held up really well in 2018,” Kieran Curtis, fund manager at Aberdeen Standard Investments, said by phone. “Not to say that asset prices are totally immune from pressures. Spreads will be wider I suspect from the last issue Nigeria did, but the market conditions haven’t been as unhelpful for Nigeria as they have been for some of the other headline grabbing places.”

Some of Nigeria’s Eurobonds reversed their gains after the announcement. Yields on the $1.25 billion of notes maturing in February 2038 rose 5 basis points to 8.36 percent by 3:52 p.m. in London, having earlier been as low as 8.29 percent.

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