Nigeria to borrow ₦385bn through bond issuance

The Federal Government is to borrow between ₦315 billion and ₦385 billion ($1 billion-$1.26 billion) in the first quarter of the year through sales of naira-denominated bonds, the Debt Management Office has said.

The DMO stated on Friday that it would auction bonds maturing in 2021 and 2027 and introduce a new seven-year bond, Reuters reported.

It said the 2021 and the 2027 were benchmark bonds that were being currently traded.

The debt office said its issuance programme had been structured to ensure that funds required by the government to finance its budget deficit were provided during the year.

The Federal Government issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

The government is planning to borrow N850bn offshore to help part-finance the 2018 budget.

It also expects $700m to come from international sources, the portion of 2017’s funding that it has yet to raise.

The DMO raised $2.8bn from the international market last year, selling $2.5bn in Eurobonds in November and another $300m via Diaspora bonds earlier.

The Federal Government would raise ₦110 billion by selling sovereign bonds with maturities of five and 10 years on January 24, according to the DMO.

The debt office had said last week that it would raise ₦50 billion with the five-year bond and ₦60 billion with the 10-year paper, using the Dutch auction system.

The bonds are re-openings of previous issues and the result of the auction is expected to be published on January 26, according to the DMO.

The $3bn Eurobond bond launched in December was oversubscribed by nearly four-fold, the government said.

The bonds yields were offered around 6.75 per cent for the 10-year instrument while the 30-year paper was at 7.875 per cent, according to the information from the country’s debt office.