LAGOS, Dec 10 (Reuters) - Nigeria is likely to delay a debut $500 million Eurobond originally planned for this year because of volatility in global markets, sources familiar with the transaction said on Friday.
Sub-Saharan Africa’s second-biggest economy had planned a roadshow to the United States next week and aimed to complete the issue by the end of the year, but the plans were put on hold at the eleventh hour because of market volatility due partly to the debt crisis in Europe, sources said.
“It is likely to be postponed because of market volatility, and all of the distraction around the Irish situation. As for the timing, that is being discussed,” one of the sources said.
A second source confirmed the roadshow had been delayed.
“By the original schedule, they should have travelled last night,” the source said, declining to be named.
Africa’s top crude oil exporter first announced plans to borrow in the international bond market in September 2008 but later put the issue on hold, citing adverse market conditions.
The aim of the 10-year bond is to set a benchmark in the global market for Nigeria, rather than to raise funds, meaning the pricing is more important than the timing.
“Nigeria doesn’t need the money, so it’s not as if the issue has to be done before the end of the year,” one source said.
Nigeria last month appointed Deutsche Bank and Citigroup as bookrunners for the Eurobond and named Barclays Capital and FBN Capital, a subsidiary of Nigeria’s First Bank, as its financial advisers.
Citi’s Chief Executive Vikram Pandit said on Wednesday he anticipated significant demand for the bond issue.