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HomeBusinessNigeria raises N124 bln in new debt, short of N225 bln proposed,...

Nigeria raises N124 bln in new debt, short of N225 bln proposed, says DMO

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By Oludare Mayowa 

Nigeria raised a total of N123.84 across three tenors of its sovereign bonds on Monday, short of the N225 billion it had planned to sell at the auction, data from the Debt Management Office (DMO) showed on Tuesday.

However, yields on the debts were better than they were at the previous auction as there are increases in returns on all the three tenor instruments sold at the auction.

The debt office sold N5.30 billion worth in the 10-year tenor paper maturing in 2025, N17.82 billion in the 10-year paper maturing in 2032 and N100.72 billion in the 20-year paper maturing in 2042.

The DMO had initially announced the offering of N75 billion apiece across the three tenor instrument but the combination of weak demand and low-interest yield forced the debt office to sell below the amount offered.

READ ALSO: Court declares two foreign businessmen wanted over N9.4 bln fraud, failure to face prosecution

The 2025 instrument was issued at 11 per cent, higher than the 10.10 per cent the same tenor paper was sold at the last auction. The 2032 paper was sold at 13 per cent against 12.5 per cent previously while the 2042 debt was sold at 13.75 per cent against the 13.15 per cent it was sold at the last month’s auction.

“Although subscriptions for the 13.53 per cent FGN MAR 2025 and 12.50 per cent FGM APR 2032 bonds were below the offered amounts, Investors’ appetite for the langer dated 13.00 per cent FGN JAN 2042 bond remained strong, with total subscriptions of N104.91 billion, representing about 140% of the amount offered for the instrument.

The amount allotted to successful bidders at the Auction for the three instruments was N123.85 billion. The allotments were made at 11.0000 per cent for the 13.53 per cent FGN MAR 2025;
13.0000 for the 12.50 per cent FGN APR 2032, and 13.74900 per cent for the 13.00 per cent FGN JAN 2042,” the debt office said in a statement.

Nigeria issues sovereign bonds on monthly basis as part of measures to raise cash to back government budget deficits. The bonds are also issued to help manage liquidity in the system and create benchmarks for corporate bond issuances in the country.

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