Nigeria Just Can't Catch A Break, Blames Fed For Pulled Bond Sale

Tyler Durden's picture

Global stock markets are soaring and near record highs. Credit markets are exuberant and near record tight spreads and low yields; and volatility (bond, FX, and stock) has been suppressed to the point of non-existence. So why is it that just 3 months after Nigeria issued debt (in an oversubscribed auction) at a yield below that of Portugal's, Nigerian lender Diamond Bank has suspended the launch of its seven-year $550 million bond? It appears it's the Fed's fault! as the bond's marketers noted "pricing turbulence in the international debt market," in a presentation seen by Reuters on Tuesday. Still think the Fed will ever actually exit?

Via Reuters,

"Our efforts towards injection of Tier II capital have been put on hold following the persisting pricing turbulence in the international debt market," it said, ahead of a conference call with analysts on Tuesday to discuss its nine-month results.


Diamond's bond was marketed by France's BNP Paribas and Afrexim Bank as lead managers.

While that makes some sense, it is perhaps more an indication of investor anxiety about the future since Nigerian rates hve actually dropped notably in recent weeks as the world rallied off debt ceiling lows...

So is it concern that the flow will slow (meaning no more greater fool to spin this to) that has kept the money on the sidelines from buying Nigerian bank debt?

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Groundhog Day's picture

It's time to invest in Africa, "the last great growth oppurtunity on earth".  A Bloomberg radio commericial told me

ZerOhead's picture

"It's time to invest in Africa"

All donatio... errr... investments eagerly accepted!

Dareconomics's picture

Is this the first sign that the bond bubble is about to explode? The market is gobbling up just about any paper issuers care to print nowadays.

Dr. Engali's picture

I guess the Nigerian prince isn't sending out enough blast emails about Nigerian "assets" waiting to be transfered into our accounts.

Gringo Viejo's picture

I'm "All In" on Nigerian Bonds.
Less my Bre X stock,of course.

youngman's picture

I wonder how many Pension funds are going to be buying this crap just to chase returns....after all 13% looks good on paper...that should get him a bonus at the end of the year with that on his charts

Big Brother's picture

If America has "Bonds" (Bondage)

Brits have "Gilts" (Guilt)

Germans have "Bunds" (Bondage again)

What do the Nigerians have? "Slaves" (Slavery)

"The Nigeria Treasury issued 10-yr Slaves on 11/05/2013 at 12.55%"  I'm noticing some similarities- Oh the irony.

q99x2's picture

Financial Terrorists can't quit. They are like pedophiles. You have to lock them up.

element115's picture

Nigeria, please.

AustrianJim's picture

I discovered some $30 millions in bonds left in an unattended account. I need some help getting them out. If you can send me $2700 for processing fees, I will split it with you. That is all.

Urban Redneck's picture

Diamond can borrow dollars or euros at the short end of the curve at probably 300-400bps over LIEbor. 7yrs is also a rather strange duration given the generic concentration of lending to corporate borrowers for 5yrs. But if you're trying to run a business in Nigeria borrowing in USD or EUR at 10% would be far preferable to borrowing in banana bucks at twice the price (unless the business was entirely domestic and might have difficulty with the currency risk). Weird, but then so is Nigeria, where legitimate businessmen speak the same dialect of English as the infamous email scammers (and there is a "low intensity" WAR going on... at a higher intensity than last year)

Big Ben's picture

Nigerian bonds or Twitter IPO shares? Life is full of hard choices.