UPDATE 2-Nigeria's First Bank gets approval for bond issue

* First Bank gets regulatory green light for $3.4 bln issue

* Proceeds to be used for infrastructure projects

(Adds trader, analyst reactions)

By Chijioke Ohuocha

LAGOS, July 23 (Reuters) - First Bank FBNP.LG has received regulatory approval for a 500 billion naira ($3.4 billion) bond issue in what would be Nigeria's first corporate bond in three years, industry sources said on Thursday. The sources, who asked not to be named, said the bank got the green light from Nigeria's central bank and the Securities and Exchange Commission. It is also seeking approval from the Nigerian Stock Exchange (NSE) to trade the bond at the bourse.

First Bank, Nigeria's oldest bank, aims to use the bond issue to raise funds for infrastructure projects such as the Lagos-Ibadan highway, one source said.

No one at First Bank was immediately available for comment.

First Bank's stock on Thursday rose the 5 percent limit at the NSE, up 0.68 points to 14.28 naira, partly on the news.

Analysts welcomed plans for Nigeria's first corporate bond issue since Access Bank's ACCE.LG 13.5 billion naira convertible bond in October 2006.

"It's a positive development, though we don't know much about the structure of the bond," said Lagos-based Samir Gadio of Renaissance Capital.

"If we are talking about a bond in local currency, it's going to be attractive because of the demand and supply gap for corporate bonds," he added.

Nigerian companies have not ventured into the corporate bond market for several years because of the high cost of issuing debt, and tax concerns, bank officials said.

New central bank Governor Lamido Sanusi said earlier this month he wants more companies to raise funds through the bond market.

Sanusi said the regulator would seek to reduce the cost of corporate bond issues and work with tax authorities to have a tax-free yield curve. [ID:nLD726472] (Additional reporting by Tume Ahemba; Writing by Randy Fabi; Editing by Rupert Winchester and Marie Maitre)