Nigeria to redeem 762.5 bln naira T. bill with planned Eurobond sale -finance minister

Nigeria plans to redeem 762.5 billion naira ($2.5 billion) worth of treasury bills from the proceeds of a planned $2.5 billion Eurobond, to lower borrowing costs for the government, Finance Minister Kemi Adeosun said on Wednesday.

The West African country expects to save 64 billion naira each year after it refinances the local bills with the dollar debt, she told reporters following a cabinet meeting in the capital Abuja.

In January, the head of the debt office 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.

Nigeria wants to refinance $3 billion worth of a local treasury bill portfolio of 2.7 trillion naira.

It sold $3 billion in Eurobonds in November, part of which it used to fund its 2017 budget, and then paid off 198 billion naira 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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