From Business Day

The $300-million First Bank of Nigeria Eurobond was launched at a yield of 8.5 percent with demand from Nigerian financial institutions and local investors accounting for more than a third of the order book, helping to offset the more muted bid from U.S. and UK-based investors.

The Eurobond launched at a coupon of 8.25 percent for the next five years (and a coupon of 6.875 percent plus two-year U.S. swaps afterwards), with an initial price of 98.99. The bond matures in 2020, but is callable in 2018.

“Clearly, the lesson here is that domestic demand for Nigerian (and to some extent African) Eurobonds increasingly matters,” Samir Gadio, an emerging markets strategist at Standard Bank, London, said in a note to BusinessDay.

“Perhaps this suggests that the subordinated nature of the Eurobond was less of a concern for domestic accounts, especially since they are familiar with First Bank of Nigeria’s intrinsic fundamentals and track record and because they felt adequately compensated by the above-average U.S. dollar yield.”

The new First Bank of Nigeria (FBN) Eurobond issue was modestly oversubscribed – with an order book of around $450 million–which analysts say probably reflects its Tier II format and also a more cautious global risk environment in recent months.

Asset managers accounted for 76 percent of the order book while the share of banks and private banking accounts stood at around 22 percent.

Read more at Business Day.