Nigeria will consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost, the head of the Debt Management Office told Reuters on Thursday.

Patience Oniha said the country will also try to get back into the JP Morgan Government Bond Index (GBI-EM), with improving liquidity in the local currency market.

She said a Eurobond placement will depend on market conditions, pricing and tenor.

“We are looking the issue probably first quarter depending on what the advisers say and subject to the market conditions,” the DMO director general told Reuters by phone.

Nigeria could also look at a possible syndicated loan as an alternative, Oniha said, adding that the issue is part of a $5.5 billion fund raising program approved by parliament last year.

Nigeria has said it plans to refinance $3 billion worth of a local treasury bill portfolio of 2.7 trillion naira ($8.9 bln).

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

Oniha said local debt yields have started to fall after it paid off the bills in December, though debt was still attractive especially to foreign funds looking at emerging market bonds.

“The reason JP Morgan took us out of the index was liquidity in the FX market. Now there’s an investor window where activities have picked up, that’s a good reason to try to get back in,” Oniha said.

Nigeria plans to raise $2.8 billion in new offshore loans as part of its 2018 budget. Oniha said she could tap capital markets or concessionary loans from the World Bank. But the budget has to be approved by lawmakers before funding options can be considered. (Reuters)