LAGOS (Reuters) - Nigeria's Niger State plans to issue a 12 billion naira seven-year bond to fund infrastructure projects, the securities regulator said on Thursday.
The northwestern region, one of Nigeria's 36 states, is home to around 4 million people. It plans to use the proceeds from the bond sale to fund road projects and the construction of 500 housing units.
"The application has gotten regulatory approval and is currently at the stage of book building," Obi Adindu, spokesman for Nigeria's Securities and Exchange Commission, told Reuters by text message.
Nigeria is growing as an investment destination with foreign holdings of its bonds swelling nearly fivefold in the last year to an estimated $5.4 billion after the country's inclusion in a JP Morgan local currency bond index.
Niger State issued a 9 billion naira seven-year bond two years ago, under a 30 billion naira debt issuance program at 14 percent, to fund road projects.
One fund manager who is considering investing in the Niger bond told Reuters he had put in a bid for the debt and was looking for a yield of 14 percent to buy the paper. He added that he expected Niger to be priced above Lagos State.
Rival Lagos State, Nigeria's commercial capital, issued 87.5 billion naira seven-year bond last week priced at par to yield 13.5 percent.
The book building closes on Friday, the fund manager said.