Nigeria To Sell N155 Bln Bonds At Auction On Wednesday
Nigeria plans to sell N155 billion worth of sovereign bonds at its first auction on Wednesday as part of government domestic borrowing plan to plug the finance gap in the 2020 budget.
The Debt Management Office (DMO) will auction N50 billion apiece in bonds maturing in 2023 and 2029 respectively at the auction.
It will also sell a total of N55 billion in its longest tenor paper maturing in 2049 at the Wednesday’s auction, the debt office said in a notice to money market dealers on Tuesday.
Last week, the debt office announced plans to borrow between N420 billion and N510 billion in the first quarter of this year through the issuance of domestic bonds.
The DMO had projected the issuance of its monthly bonds in the first quarter at between N140 billion and N170 billion.
Fixed income traders said the first auction of the year is expected to attract strong demand in spite of falling yields on local debt.
“We expect the money market to remain liquid and local investors retain their appetite for T-bills and FGN bonds.
“This should be reflected at the FGN bond primary auction tomorrow where we expect strong demand,” the local unit of Citibank wrote in a note to clients on Tuesday.
Yields on domestic debt have fallen rapidly from the height of 18 percent a year ago to an average of 12 percent, with the 5-year paper attracted 11 percent, 10-year traded at 12 percent while the longest tenor of 30-year was sold at 13 percent at the Dec. auction.
Nigeria projected an estimated N2.18 trillion deficits in the 2020 budget and would be financed through foreign and domestic borrowing.