Source bloomberg.com: Paul Okolo, 13 January 2010

Nigeria, which vies with Angola as Africa’s top oil producer, will probably sell $500 million of Eurobonds in the second quarter, Finance Minister Mansur Muhtar said. The timing is to enable “the market to settle down and allow the necessary preparations to be done,” Muhtar said yesterday in an interview in the capital, Abuja. He didn’t provide details on the bond’s coupon and which banks are arranging it.

Nigeria first announced the plan in September 2008 and suspended it in March, as investors withdrew their funds from emerging markets, because of the global financial crisis. Sub- Saharan Africa’s second-largest economy after South Africa plans to use the sale to finance its budget deficit earmarked to reach 1.56 trillion naira ($10.3 billion), or 4.8 percent of gross domestic product, this year. It’ll be “a benchmark for other issues as the first ever Eurobond” sale by the government, Iheanacho Udoye, an analyst at Financial Datanet House Ltd., a Lagos-based financial-markets research company, said in a telephone interview. The yield on the bonds will probably be lower than a year ago because conditions in the market are more favorable and higher oil prices have boosted fiscal revenue, Udoye said. “There’s no fear of default.”

Oil Rally
The country had foreign currency reserves of $43.56 billion as at Jan. 11, the Central Bank of Nigeria said on its Web site. Crude oil for February delivery traded at $79.63 a barrel today in electronic trading on the New York Mercantile Exchange, compared with $37 a barrel a year ago.

Nigeria’s banking crisis may push up the yield on the bonds, Udoye said. The central bank bailed out some of the banks last year with 620 billion naira and sacked eight chief executive officers after a debt crisis threatened the industry.

Nigeria’s foreign currency-denominated long-term debt is rated “B+” by Standard & Poor’s, or four notches below investment grade, and “BB-”, or three steps below investment grade, by Fitch Ratings.

Nigerian Bank Nigeria

Source bloomberg: Paul Okolo, 13 January 2010

Nigeria, which vies with Angola as Africa’s top oil producer, will probably sell $500 million of Eurobonds in the second quarter, Finance Minister Mansur Muhtar said.

The timing is to enable “the market to settle down and allow the necessary preparations to be done,” Muhtar said yesterday in an interview in the capital, Abuja. He didn’t provide details on the bond’s coupon and which banks are arranging it.

Nigeria first announced the plan in September 2008, and suspended it in March, as investors withdrew their funds from emerging markets, because of the global financial crisis. Sub- Saharan Africa’s second-largest economy after South Africa, plans to use the sale to finance its budget deficit earmarked to reach 1.56 trillion naira ($10.3 billion), or 4.8 percent of gross domestic product, this year. It’ll be “a benchmark for other issues as the first ever Eurobond” sale by the government, Iheanacho Udoye, an analyst at Financial Datanet House Ltd., a Lagos-based financial-markets research company, said in a telephone interview.

The yield on the bonds will probably be lower than a year ago because conditions in the market are more favorable and higher oil prices have boosted fiscal revenue, Udoye said. “There’s no fear of default.” The country had foreign currency reserves of $43.56 billion as at Jan. 11, the Central Bank of Nigeria said on its Web site. Crude oil for February delivery traded at $79.63 a barrel today in electronic trading on the New York Mercantile Exchange, compared with $37 a barrel a year ago.

Nigeria’s banking crisis may push up the yield on the bonds, Udoye said. The central bank bailed out some of the banks last year with 620 billion naira and sacked eight chief executive officers after a debt crisis threatened the industry.

Nigeria’s foreign currency-denominated long-term debt is rated “B+” by Standard & Poor’s, or four notches below investment grade, and “BB-”, or three steps below investment grade, by Fitch Ratings.

Nigerian Bank Nigeria