UPDATE 2-Nigeria picks Deutsche, Citi for debut intl bond

* Deutsche, Citi emerge after close contest

* Yield expected to be lower than Ghana Eurobond

* Fitch outlook revision seen having little impact

(Adds background)

By Felix Onuah

ABUJA, Nov 3 (BestGrowthStock) – Nigeria has chosen Deutsche Bank
(DBKGn.DE: ) and Citigroup (C.N: ) as bookrunners for its $500
million debut international bond, Finance Minister Olusegun
Aganga told Reuters on Wednesday.

Sub-Saharan Africa’s second biggest economy plans to issue
the 10-year bond before the end of the year to set a benchmark
in the international capital markets that will allow Nigerian
state governments and companies to follow suit.

“It was keenly contested … but in the end these two,
Deutsche Bank and Citigroup, emerged the two bookrunners,”
Aganga told Reuters in the capital Abuja.

“One very strong house in Europe … and one very strong
house in the United States, that is how we split it.”

Nigeria last month named London-based Barclays Capital
(BARC.L: ) and FBN Capital, a subsidiary of Nigeria’s First Bank
(FIRSTBA.LG: ), as its financial advisers for the bond.

Africa’s most populous nation first announced plans to
borrow in the international bond market in September 2008, but
soon put the issue on hold, citing adverse market conditions.

Improving perceptions of African risk and demand for
emerging assets as investors seek better returns than they can
get in more established markets have since pushed yields to
all-time lows on international bonds by other African borrowers.

Aganga said last month Nigeria expected the yield on the
planned bond to be lower than nearby Ghana’s Eurobond
(GH032376037=RRPS: ), which traded at a yield of 5.976 percent on
Wednesday, not far off its lowest since issue in 2007.

Ghana is due to start producing oil this year, but its
economy is much smaller than that of Nigeria. [ID:nLDE6962DF]

Nigeria expects appetite for the bond to be strong. Aganga
has said there is enough interest for the country to be able to
raise $1 billion but that it is not tempted to go above the
planned $500 million for now. [ID:nLDE69E1JS]

He said the sole aim was to set a benchmark in the
international market rather than to raise funds, and that
Nigeria had access to cheaper financing if it needed it.

Some analysts have said appetite for the bond could be
tempered by its timing, coming months ahead of presidential and
parliamentary elections, with government spending high and
foreign exchange reserves falling.

The head of the debt management office,AbrahamNwankwo,
said on Tuesday Nigeria’s debt to GDP ratio of 16 percent was
expected to remain stable next year, depending on the rate of
economic growth, suggesting the country could comfortably raise
more debt if it decided to do so. [ID:nLDE6A1130]

Most analysts have said they do not expect a recent revision
by Fitch of Nigeria’s sovereign credit outlook to negative from
stable to have any impact on the issue.[ID:nN22177498]

Fellow ratings agency Standard & Poor’s on Tuesday affirmed
its ‘B+’ long-term and ‘B’ short-term foreign and local currency
sovereign credit ratings on Nigeria, with a stable outlook.
(For more Reuters Africa coverage and to have your say on the
top issues, visit: http://af.reuters.com/ )
(Writing by Nick Tattersall; Editing by Catherine Evans)

UPDATE 2-Nigeria picks Deutsche, Citi for debut intl bond