Nigeria seeks to redeem $2.5 billion T. bill with planned Eurobond sale

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ABUJA, Feb 7 – 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.

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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. ($1 = 305.35 naira) (Reporting by Felix Onuah; Writing by Chijioke Ohuocha; Editing by Toby Chopra)

Naija247news
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Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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