The Debt Management Office,DMO, on Thursday, February 4, unveiled federal government’s plans to raise a N90 billion ($452.26 million) worth of local currency denominated bonds at an auction on February 10, the second of such in 2016.
The debt office said it will sell N40 billion in paper maturing in 2020 and N50 billion in the debt maturing in 2026, using the Dutch Auction System in which the price is lowered until the bond is bought.
Both debt notes are reopenings of the previously issued bond and Nigeria is planning to borrow as much as $5 billion to help fund its budget deficit due to the plunge in oil which has also sent the naira into a tailspin.
It expects a deficit of N3 trillion ($15 billion) in 2016, up from an initial N2.2 trillion ($11 billion) estimate. Nigeria’s total debt rose to N12.60 trillion ($65.42 billion) as at December 2015, up from N11.2 trillion in 2014.
Meanwhile, the Central Bank of Nigeria sold N242.38 billion ($1.22 billion) worth of three-month-to-one-year treasury bills on Wednesday at higher yields than in its previous auction yesterday.
The bank raised N50 billion more than initially planned as it increased the amount of six-month paper auctioned from the N30 billion it had previously announced to N80 billion and sold N45.17 billion of its three-month paper at 4.95 per cent, up from 4.29 per cent at a sale on January 20. It also sold N80 billion of six-month debt at 7.97 per cent against 7.59 per cent and N117.21 billion of one-year paper at 9.49 per cent compared with the 9.32 per cent on the same date.
Total subscription stood at N400.82 billion, compared with N288.98 billion. The 3-month bills closed at 4.59 per cent on the secondary market on Wednesday, the 6-month traded at 7.87 per cent while the one year paper closed at 8.45 per cent.
