This Friday, Nigeria goes ahead with plans to issue it's first Eurobond (USD 500MM). The idea, first 'floated' in Sep. 2008, has been postponed severally to allow for 'improvement in market conditions' re: European debt crises.
Govt. officials say they don't need the money. The bond is to act as a 'benchmark' to make it easier for corporates to tap foreign bond markets.
Yet, one would question the timing of the issue what with:
+ Recent events in the African political space - Ivory Coast, Tunisia, Sudan ,Kenya .... tension in Egypt & Libya
+ Recent developments in Nigeria: GJ winning the PDP primary and in effect breaking the North-South power sharing/rotation agreement. (Elections - April 9th - single candidate must win 24/36 states or goes to run-off)
+ Unrest in Nigeria: Killings in Jos (3 died yesterday in voter registration violence), bombings in Abuja including military barracks. Boko Haram gaining 'confidence' & promising 'more attacks'
Factors including but not limited to these are bound to influence the Country Risk Premium and consequently the coupon. It should be interesting to see how this unfolds (prices) as Kenya has Eurobond ambitions of her own.
+
Fitch Sovereign rating Nigeria BB - "negative" (7 jan 2010)
+
Debt to GDP ratio 13.8
+
2010 budget deficit 6% of GDP
+
Front Month Oil - USD 91.19 (CNBC)
+
Exchange Rate USD/NGN 149.31 - 150.31 (Vola ?)
+
GDP growth 7.8% (2010)
Links:
http://www.reuters.com/a...ncialsSector&rpc=43
http://blog.foreignpolic...gns_of_a_regional_split
http://www.stanbicibtcst...aPresentation_Mar10.pdf [PDF]
http://www.bloomberg.com...uote?ticker=CEGY1U5:IND (Egypt CDS)
And elsewhere....
EGYPT CREDIT DEFAULT SWAPS
TUNISIA: Foreign "investors" doing what they do best...
Egypt Indices: Redux foreign investors http://www.bloomberg.com...s/quote?ticker=CASE:IND
http://www.bloomberg.com.../quote?ticker=EGX30:IND
http://www.bloomberg.com...quote?ticker=HERMES:IND