Buhari Asks Nigerian Senate to Approve $2.8 Billion Eurobond

(Bloomberg) -- Nigerian President Muhammadu Buhari asked lawmakers to approve the issuance of $2.8 billion of Eurobonds.

The debt will mostly be used to finance infrastructure projects and the government’s 2018 fiscal deficit, the West African nation’s Senate said on Twitter.

Bank of America Merrill Lynch analysts said last week they expect Nigeria, Africa’s top oil producer, to tap international capital markets before the end of the year, as long as Buhari gets the Senate’s permission.

That may be tricky because several ruling-party lawmakers, including Senate President Bukola Saraki, defected to the opposition in July and August as political tensions rose ahead of elections in February.

“Parliamentary proceedings could be boisterous over the remainder of the year following the defections,” said Phumelele Mbiyo, an analyst at Standard Bank Group Ltd. in Johannesburg.

Yields on Nigeria’s $1.5 billion of Eurobonds due in 2027 rose two basis points to 7.43 percent by 10:37 a.m. in Lagos, the commercial capital, extending their increase since the Senate’s announcement to 16 basis points. The government last issued dollar debt in February, when it sold $2.5 billion of 12-year and 20-year notes.

Buhari in June signed the nation’s biggest-ever budget of 9.1 trillion naira ($25 billion) for this year, and increased investment in roads, rail, ports and power to boost the economy.

To contact the reporter on this story: Paul Wallace in Lagos at pwallace25@bloomberg.net

To contact the editors responsible for this story: Sophie Mongalvy at smongalvy@bloomberg.net, ;Dana El Baltaji at delbaltaji@bloomberg.net, Paul Richardson

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