DMO raises N100b in bonds

The Debt Management Office (DMO) yesterday  sold N100 billion ($610.1 million) worth of bonds at higher yields for three- and 10-year paper.

At the same time, it was able to offer lower yields on 20-year benchmark debt.

DMO said it sold N15 billion of three-year debt at 11.49 per cent, 37 basis points higher than the 11.12 per cent the paper fetched in August.

Debt Management Office also sold N50 billion of 10-year debt at 12.23 per cent against 12.22 per cent previously. The debt office sold N35 billion worth of 20-year paper at 12.29 per cent, lower than 12.38 per cent at the previous auction.

All the debt notes were re-openings of previous issues, while total demand was up marginally to N175.99 billion compared with N174.01 billion at the previous sale.

The DMO said Nigerian companies have in recent months, issued nine bonds worth $30.4 billion in the International Capital Market.

The Director-General of DMO, Dr. Abraham Nwankwo said the Nigerian companies took advantage of the window opened through the successful issuance of Nigerian Sovereign Eurobonds to successfully issue the international bonds.

Nwankwo said the funds will be instrumental in helping Nigeria meet its infrastructural needs especially power.

He noted that “for the first time in Nigeria’s economic history, the private sector has been enabled to access long-term funds from both the domestic and international capital markets. The successful issuances of three Nigerian Sovereign Eurobonds in the International Capital Market – one in 2011 and two in 2013 – have opened the window for Nigeria’s private sector to raise required foreign currency funds.”

Nwankwo, said the DMO is now able to fund long-term real sector projects  in agriculture, manufacturing, housing, mineral exploration and processing, infrastructure, for diversified and sustainable economic growth, towards employment generation and poverty reduction”

Meanwhile, the naira is expected to come under pressure next week after oil prices continued to decline and offshore investors sold down their local debt holdings.

The naira yesterday traded at N163.90 to the dollar, compared with Wednesday’s close of N163.45 due to strong demand from importers and other forex end users. The naira closed at N162.90 to the dollar yesterday.

“We have seen strong buying interest from some offshore investors in the last couple of days, while the market is actually jittery on the continued drop in the oil price in the international market,” one dealer said.

Oil traded slightly lower below $99 a barrel on Thursday, pressured by ample supply. The naira crossed the 163 to the dollar level on Wednesday despite intervention by the central bank. The bank has been selling undisclosed amounts of dollars directly to lenders this week to try to stabilise the naira, which has declined by about 3.5 per cent this year.

Subscribe to our Newsletter

* indicates required

Intuit Mailchimp