Nigeria Raises N160bn Through Bond Sales
Nigeria on Wednesday raised N160 billion through the sale of Federal Government Bonds 45 per cent higher than N110 billion it had set out to raise at the second bond auction for the year, revised at yields below inflation.
With inflation having risen to 18.72 per cent as at January, the DMO sold the three FGN bonds at yields within 16 per cent although the range of bids was between 14 and 18 per cents. Investors interest in the federal government bonds had spiked compared to what it was last month when subscription level had waned and investors quoted for yields within 16 and 19 per cents.
The DMO said it received subscription of N337.03 billion as it sold the bonds at yields within the same range its last auction. The debt office said it raised a N70 billion bond maturing in 2036. It also issued a 2026 bond to fetch N30 billion and 2021 paper to fetch N60 billion.
Debt Management Office has raised N214.95 billion at the first bond auction for the year, 65.34 per cent above N130 billion which it set out to raise having sold the debt instruments at yields below the current inflation rate.
In January, DMO said it received subscription of N235.05 billion as it sold the bonds at yields slightly higher than its last auction. The debt office said it raised N105.10 billion bond maturing in 2036 at 16.99 percent compared with 16.43 percent at its last sale.
It also issued a 2026 bond to fetch N74.90 billion at 16.99 percent as against 16.24 percent last month and sold the 2021 note for N34.95 billion at 16.89 percent compared with 15.99 percent in December. It had planned to raise N50 billion from the 2026 bond and N40 billion each from the 2021 and 2036 bonds.
Nigerian government issues local currency bonds every month to raise funds to support its spending plan, which also goes to help the banking system manage liquidity.
The government is also facing funding challenges brought on by the low price of oil. It expects the budget deficit to widen to N2.36 trillion this year as it tries to spend its way of out of the recession. More than half of the deficit will be funded through local borrowings
