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Nigeria to sell N145 bln bonds across tenors at auction next week

By on September 15, 2020 0 82 Views

Nigeria Debt Management Office (DMO) on Tuesday said it will sell domestic bonds worth N145 billion at an auction on September 23, as part of measures to raise cash to plug the deficit gap in the 2020 government spending plan.

Nigeria’s proposed to spend about N10.9 trillion this year with around N5 trillion deficit embedded in the spending estimate, which the government plans to plug through both domestic and external borrowing.

The government had obtained $3.4 billion facilities from the International Monetary Fund (IMF) in May and anticipate another $1.5 billion from the World Bank.

Read also: Rise In Nigeria’s Debt Stock Driven By Naira Devaluation ~United Capital

The debt office said it will raise 40 billion apiece in the 30-year, 25-year and 15-year tenor bond and N25 billion in the 10-year paper at the auction.

All the debt on sales are reopening of the previously issued paper, according to the debt office public notice.

“For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on
the instrument'” the DMO said in the publication pasted on its website.

Nigeria issue bonds on a monthly basis to raise cash to plug the gap on its budget and also help set benchmark for local debt issuance.

The debt office plans to raise up to N1.5 trillion to support the government in financing this year’s budget and reduce the impact of the shortfall in revenue from crude oil exports and internally generated revenue.

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