5 local banks, 2 foreign merchant banks qualify for Nigeria’s $1bn Eurobond

Baring last minute-changes, the Debt Management Office (DMO) will by the second week of November 2016 unveil the full list of banks to participate in the Nigerian planned $1 billion Eurobond sale.

Though 19 commercial banks in Nigeria and five international merchant banks applied to handle the bond transactions, only five were shortlisted, with only two other foreign banks.

A DMO senior official, refused to name the banks that made the list, insisting that the Finance Minister, Kemi Adeosun will after discussing the issue at the Federal Executive Council make it public.

But another source disclosed that UBA, Zenith Bank, GTB, and First Bank were among the top 10 in the list, while Citibank and Deutsche Bank were on the first page-list of the foreign banks for the exercise.

“We have done our beat and have submitted the lists of qualified banks, first to Nigeria’s Bureau of Public Procurement (BPP) whose responsibility it is to send the final names, as stipulated by law, to the ministry of Finance,” an aide to the chief executive of the debt office said.

Read also: FOREIGN INVESTMENT WITHDRAWAL: How Nigeria lost $450bn –NACC

He said all other hurdles had been cleared for the programme to take off , though Adeosun is to make the final decision on the list before it will be made public any moment from now.

But observers say it is not yet clear whether the question of appointing an independent corporate entity, as manger-adviser for the bond, as raised by would-be buyers at the recent road show organised by Nigeria in London in October 2016, has been resolved.

An expert put it this way: “Without appointing a generally accepted bond manager, with professional experience and competence for the Eurobond dream, sustaining the interest of the targeted participants at the sale may be difficult.

The bond sale is to come on stream before the end of 2016.

It is expected that Nigeria will make at least $500 million from the planned Eurobond, but could have higher yield in patronage depending on the pricing.

But a major issue is the poor rating that Nigeria is currently being subjected to by various international rating agencies, including the Moody’s Investors Service, which on Friday downgraded Nigeria’s sovereign rating to B1 from Ba3 in April, 2016.

By Emma Eke….

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