Nigeria has said it plans a sovereign dollar bond this year, only its second, but could the country’s “bad bank” beat the sovereign to it?<\/p>\n
Nigerian state-backed bad bank AMCON was talking to debt investors on a non-deal roadshow in London on Tuesday morning, as it looks to fill a 5 trillion naira \u00a0($31 billion) refinancing gap. It was the second leg of the tour, after the bank visited the west and east coasts of \u00a0the United States last week.<\/p>\n
AMCON, which was set up in 2010 to absorb the debts of crisis-ridden banks in Nigeria, \u00a0reported a 2.37 trillion naira loss at the end of last year. But AMCON’s finance director Mofoluke Dosumu told investors this morning that the losses were not ongoing:<\/p>\n
\nIt\u2019s not an operational loss, rather the mark to market of various investments.<\/em><\/p>\n<\/blockquote>\n
The appeal of any dollar bond from AMCON for investors starved of African debt is that it would likely offer a higher coupon than Nigeria, yet the debt carries an explicit sovereign guarantee – a concern for investors burnt by situations such as the payment standstill in 2009 of state-owned Dubai World.<\/p>\n
Mustafa Chike-Obi, ceo of AMCON, told Reuters that the bank would probably follow up on the non-deal roadshow with a deal roadshow in the third quarter, encompassing Germany, Dubai and Singapore.<\/p>\n
Chike-Obi said the bank spoke to 26 investors on the U.S. leg of its roadshow.<\/p>\n
\nThe interest was uniformly very, very high. You had people like Goldman Sachs, who said if we came up with a $2 billion bond, they would be interested.<\/em><\/p>\n<\/blockquote>\n