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Okonjo,
Nigeria’s Economic Minister, Dr. Ngozi Okonjo-Iweala
Nigeria raised $1 billion in the first dollar bond issued by a developing nation since the market went into a tizzy in May. The bond issue was four times oversubscribed, said Nigeria’s Finance Minister Ngozi Okonjo-Iweala in a conference call Tuesday. “It was the correct decision,” she said, on deciding to issue a bond at this time, when markets were still reeling under the impact of the U.S. Federal Reserve’s statement that it would begin to withdraw its stimulus. Nigeria, which concluded its roadshow to investors marketing the bond deal last week, held off from issuing a bond. The Finance Minister said signs of recovery, though fragile in the U.S. and Japan, led her to believe that there will be a global adjustment of prices. “We didn’t want to wait any longer and saw this as a window of opportunity,” Ms. Okonjo-Iweala said. Nigeria sold its $500 million, five-year tranche at a coupon of 5.125% and the 10-year, $500 million tranche with a coupon of 6.375%. She said the country planned to use the proceeds of the sale to build transmission lines that would help support the reforms in its power sector. She added that while the country had drawn down on its Excess Crude Account, a backup fund created with its oil revenues, the “ECA has been deployed precisely in the manner it was designed to operate.” The fund’s reserve has dropped to about $5 billion from nearly $9 billion at the end of 2012, she said. Ms. Okonjo-Iweala added that the president had declared emergency measures to restore the production at two oil pipelines, adding 220,000 barrels in capacity, to bolster the fund’s reserves, especially at a time of falling oil prices. dowjones
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This article was first published on 3rd July 2013

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