Nigerian officials on Wednesday met with prospective investors in New York to market the country’s 500 million dollars debut Eurobond, due to be issued on Friday. Minister of Finance, Olusegun Aganga led officials from the Debt Management Office (DMO), the CBN and the ministry to the meeting held at New York Palace hotel.

The team is expected to meet with other investors in Boston, joined by another team of Nigerian officials arriving from a road show in London. Aganga is quoted as saying that the meetings with investors were not open to newsmen.  Hence, journalists who travelled with the team were asked to stay out of the meetings.

Aganga told journalists that “because this is a private placement, our advisers told us that we are not allowed to talk about it until after the pricing (Friday). “That is under the U.S. rule,” he added. Asked about his expectation for the bond, about which he has previously spoken optimistically, he said: “At this stage, it is premature, we only started meeting with investors Tuesday and Thursday I will spend the whole day meeting with investors in Boston.

“There is also a team in London who will join us in Boston tomorrow, then we should be able to compare notes and we can come up with something, in terms of expectation. Aganga said a planned meeting with investors in Los Angeles on Tuesday, was not cancelled, saying “ I had all the meetings through the phone yesterday”.  He also did not disclose any details of the meetings. Last September, Aganga said Nigeria, Africa’s top oil exporter, planned to use the Eurobond as a benchmark for local companies to price debt and fund development projects. Some analysts questioned by Reuters on Wednesday expect Nigeria to yield above Gabon’s 2017 Eurobond, which is trading around 5.2 per cent.

According to Reuters, the analysts put the expected yield for the 10-year paper in a range of 5.5 to 7.7 per cent, compared with Ghana’s Eurobond, which is due to mature in 2017 and which is currently  trading at around 6.2 per cent. The Federal Government appointed Deutsche Bank and Citigroup as book-runners  for the Eurobond while Barclays Capital and FBN Capital, a subsidiary of Nigeria’s First Bank, are financial advisers to the issue. Nigeria was forced to postpone the sale two years ago as a result of the global financial crisis in the international capital markets, a DMO statement, dated Oct. 4, on its website said.

According to the data on the DMO website, Nigeria’s total external debt stock as at Sept. 30, 2010 was 4.5 billion dollars. It also put its total domestic debt at N4.2 trillion, on Sept. 30, 2010 while Nigeria’s debt to GDP ratio currently stands at 16.58 per cent. Figures from the CBN website put the country’s reserves at 33.2 billion dollars as of Oct. 4, 2010.

.  issues Eurobond guidance of 7%

Nigeria has issued guidance for its $500 million debut Eurobond indicating a yield of around 7 per cent, higher than that of Ghana, market sources said on Thursday. The guidance for the 10_year paper said the timing and coupon had yet to be announced. The issue was expected on Friday.

Seven analysts contacted by Reuters put the expected yield for the bond in a range of 5.5 _ 7.7 per cent, compared with Ghana’s Eurobond, due to mature in 2017, which is trading at around 6.2 per cent. Nigeria, aims to set a benchmark in the global market and those involved in the deal say the pricing is key.

“We had expected a moderately lower yield which would reflect the abundant global liquidity and appetite for high_yielding risky assets, coupled with Nigeria’s strong current account fundamentals, robust foreign reserves and marginal external debt,” said Standard Bank analyst, Samir Gadio.

At such levels, Nigeria’s Eurobond looks attractive relative to rated peers, and this reinforces our view that the instrument will rally in the coming weeks as significant demand pushes down secondary market yields,” he told Reuters.

A successful issue by Africa’s top oil exporter could reassure others on the continent of the strength of demand for African debt, convincing them to press ahead with similar but delayed plans.