THE Nigeria’s $500 million Eurobond was massively oversubscribed over the weekend as investors appetite thickens. 
Sources said bids during the book building process on Friday pointed to a yield of 6.5-7.0 percent for the 10-year bond, although the subscription and pricing was unknown as at the time of writing this report.
 A senior government official said, “There is a high level of excitement over the deal ... The challenge the government faces will be that of allotment,” said one senior government official, asking not to be named.”A successful issue by Nigeria may reassure others on the continent of the strength of demand for African debt, convincing them to press ahead with similar but delayed plans. Nigeria issued guidance on last week Thursday, posting a yield of 7 percent plus or minus 25 basis points, above Ghana, whose 8.5 percent Eurobond due 2017 was yielding around 6.2 percent at 1130 GMT.
“The average bidding that we’re getting ... is at the top end of 6, probably 6.5-7.0 percent. It is higher than Ghana,” one source close to the deal said. Sources said there was around one billion dollar in demand, meaning the offer could be two times oversubscribed, nonetheless a lower level of appetite than some analysts had expected.  While demand for high-yielding assets, the paucity of West African credit and the relatively low volume of the issue are expected to fuel appetite, some potential investors have been put off by the rapid depletion in Nigeria’s oil savings.   
Fitch assigned the issue a ‘BB-’ rating on Friday, saying low debt ratios and robust growth played in Nigeria’s favour, but also noting concern about a decline in reserves last year despite a rise in oil prices and production. Fitch disclosed that reserves risen around $1 billion since the end of 2010, but in the absence of fundamental institutional reforms on the usage of oil revenues and savings, this gradual build-up is unlikely to be sustained
A  leading fund manager who participated in Eurobond issues by Ghana and fellow African oil producer Gabon at the end of 2006 said he was steering clear of Nigeria’s offering given concerns over the huge outflows from oil savings.