Moody’s Investors Service has commended plans by Asset Management Corporation of Nigeria, AMCON, to retire about a third of its $35billion bonds and refinance the rest by 2014.
AMCON is expected to issue a bond in December to refinance the banks “entire exposure” at an interest rate of about 6 percent over a 10-year period.
The Central Bank of Nigeria (CBN) is expected to invest N3.6 trillion in the bond.
Moody’s said this will boost the country’s creditworthiness and eliminate the government’s indirect exposure to private creditors, adding that economic growth in Nigeria is resilient.
The agency’s rating for Nigeria is BA3, three levels below investment grade but Moody’s recently noted that an upgrade of the rating is hindered by corruption, weak institutions and its vulnerability to oil price drops.
