Jan 17 (easykobo.com) - Nigeria is on track to issue its first Eurobond by the end of current week by January 21. The road show to gain popularity for the bond will simultaneously begin tomorrow (Jan 18) in Berlin and Los Angeles. On Wednesday the road trip will simultaneously move to New York and London before concluding on Thursday in Boston. On Friday, the bond will be issued to the subscribers based on demand for the bond.
The $500 Million bond is expected to be snapped up in very little time due to the small size of the offering. The bond will yield 10% over 10 years. Nigeria investment rank is B , four notches below investment grade and that explains the relatively high coupon rate. However this is not going to cause much concern to the buyers of the bond because the size it relatively small and any one hedge-fund could snap up the entire offering.
Director of Nigeria’s Debt Management Office (DMO) told reuters that “The bond issue will be concluded on Friday January 21. A new window is being opened, particularly for the private sector to have access to the international capital market,” The bond is expected to pave the way for Nigerian businesses to raise debt from foreign banks’ offering much lower interest rates than Nigerian banks’.
Nigeria first wanted to launch this bond in December 2010 but European debt crisis at the time had put off those efforts and the launch was postponed to January. Everything since then has gone on track and all deadlines have been met.
Citigroup and Deutshe Bank are the book runners for the bond. Visit www.easykobo.com to remain up to date with Nigeria’s financial environment.
