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By Chijioke Ohuocha
ABUJA, Feb 14 (Reuters) - Nigeria plans to appoint advisers for a $3.3 billion Eurobond issue through an open competitive bid process and expects to complete an approval process for the sale soon, the Debt Management Office (DMO) said on Friday.
The new Eurobond will be used to partly fund the government's 2020 budget deficit and refinance an existing $500 million eurobond due in January next year, the DMO said.
"Whilst the approval process ... is expected to be completed soon, transaction advisers ... will be through an open competitive bidding process," the DMO said.
Citigroup, Standard Chartered Bank and local firm FSDH Merchant Bank acted as financial advisers on the last Eurobond sale.
Nigeria has been considering a dollar bond issuance after staying away from the international debt market in 2019 due to time constraints before the end of its budget cycle.
The West African country held its last Eurobond sale in 2018, its sixth outing, where it raised $2.86 billion.
Nigeria's Eurobond plan comes after neighbouring Ghana sold a $3 billion Eurobond last week that was five times oversubscribed. Investors are seeking high-yielding debt despite the possible impact that the outbreak of coronavirus in China could have on its major trading partners in Africa.
Nigeria has been borrowing to fund growth after a 2016 recession slashed income and weakened its currency. In December, ratings agency Moody's downgraded Nigeria's outlook to negative from stable, citing increased risk to government revenue.
The DMO says Nigeria is mindful of rising debt cost.
"The plan ... is to first maximize financing from relatively cheaper concessional sources where available, and the balance, if any, ... through the issuance of Eurobonds," the DMO said. (Reporting by Chijioke Ohuocha; Editing by Hugh Lawson and Gareth Jones)