FG To Redeem N762.5bn Treasury Bill With Proposed Eurobond Proceeds

FG To Redeem N762.5bn Treasury Bill With Proposed Eurobond Proceeds

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Post Views: 151 Nigeria’s Finance Minister, Mrs. Kemi Adeosun, on Wednesday in Abuja announced by the Federal Government to redeem N762.5bn (about $2....

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Nigeria’s Finance Minister, Mrs. Kemi Adeosun, on Wednesday in Abuja announced by the Federal Government to redeem N762.5bn (about $2.5 billion) worth of treasury bills from proceeds of its proposed $2.5bn Eurobond.
This, she said, would lower borrowing costs for the government, thereby saving N64bn each year after it refinances the local bills with the dollar debt, she told reporters after the regular Federal Executive Council meeting in Abuja.
In January, Mrs. Patience Oniha, Director-General of the Debt Management Office (DMO) told Reuters, the government would consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost.
The Federal Governments seeks to refinance $3 billion worth of a local Treasury bill portfolio of N2.7tr.
It sold $3bn in Eurobonds in November, part of which it used to fund its 2017 budget, and then paid off N198bn in treasury bills in December.
The debt pay-off lead to a drop in rates by around 300 basis points which translates into savings for the government, Adeosun said.
On Wednesday, bond yields rose 50 basis points to a level last seen five months ago as global risk-off sentiment spread to local assets. The rise hit the actively traded five year bond and benchmark 20-year debt the most.
The minister said the cabinet reappointed the banks that handled the previous eurobond sale – Citigroup, Stanbic IBTC Bank and Standard Chartered Bank – for the new bond sale.

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