President Muhammadu Buhari has written to the Senate requesting approval for an external loan of $5.5 billion.
The President said the loan would be used to fund capital projects in the 2017 budget.
Some of the projects are the Mambilla Hydropower Project, Construction of a second runway at the Nnamdi Azikwe International Airport, counterpart funding for Rail projects and the construction of the Bodo-Bony Road with a bridge across Opobo Channel.
In a letter to the Upper Chamber dated October 4, 2017, read by Senate President Bukola Saraki at plenary, the President however, claimed ignorant of the Terms and Conditions guiding the loan.
According to him, the Terms and Conditions would be revealed at the point of issuance of the loan based on the prevailing market conditions.
“With respect to the terms and conditions of the proposed external borrowings, the Senate may wish to note that being market based transactions , the terms and conditions of the borrowing can only be determined at the point of issuance of finalisation based on prevailing market conditions in the ICM.
“It is important to state that the previous issuance of eurobonds by Nigeria were at the following coupons – USD500 million (2011/10 Years) : 6.75 percent, USD 500 (2013/5 years) 5.125 percent, USD500 (2013/10-years) ,6.375 percent and USD 1,500 million (2017/15 years) :7.875, while the USD300 million Diaspora Bond (5-years) issued in June 2017 was at a couple of 5.625 percent.
“These coupons were based on the prevailing market conditions at the respective times. It should be noted that the current market conditions are more favorable than at the time of Nigeria,’s last issuance of the Eurobonds in March 2017 and Diaspora bond in June 2017, with secondary market yield lower than the coupons.
“The federal ministry of Finance, Debt Management Office and the Federal Government appointed Transaction parties for the proposed External Borrowings will work assiduously within the context of the market to secure the best terms and conditions for the Federal Republic of Nigeria,” the letter reads in part.