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Nigeria To Raise Funds From Eurobonds

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SAN FRANCISCO, December 05, (THEWILL) – Nigeria is set to raise funds from its first international bond since 2013 as the government is in talks with Standard Chartered, Citibank and Stanbic IBTC to arrange the Eurobond sale.

THEWILL recalls that Vice-President Yemi Osinbajo had last month revealed that the Eurobond sale would take place in the first quarter of 2017 as the government deals with the worst fiscal crisis in 25 years.

Analysts believe that a successful debt sale, coupled with the recent rise in oil prices following a deal between OPEC members and loans from bilateral and multilateral lenders such as the World Bank, would mark the end of a year of repeated setbacks for Nigeria and strengthen the country's position in global capital markets after years in the cold.

Efforts by Nigeria to tap the bond market earlier this year have been frustrated by volatile oil prices, currency weakness after the peg was abandoned in June and the government's failure to implement further reforms demanded by the international community while prices for existing debt have fallen sharply as investors have shied away unsettled by militant attacks in the oil-producing Niger-delta.

Nigeria first issued international debt in January 2011, repeating it once again in mid-2013 to raise $1bn of five- and 10-year debt. The yield on Nigeria's bond due in 2023 jumped from 6.6 per cent at issue to almost 10 per cent earlier this year and now trades at 7.8 per cent.

Meanwhile, oil production fell sharply as attacks to energy infrastructure, vandalisation and production challenges curtailed supplies and compounded the effects of the price of oil leading to an exception to the recent OPEC agreement to cut output for the first time since the global financial crisis.

Story by Oputah David