Nigeria raises N409.99bn from first bonds auction in 2020 – DMO

The Debt Management Office (DMO) said the Federal Government of Nigeria realised N409.99 billion from the sales of bonds at its first debt auction this year on Wednesday.

This represents biggest single sale ever as was overwhelmed by the huge subscription from investors at the auction even as the debt office had offered N155 billion, spread across the three tenor bonds at its first auction of the year.

DMO, however, received more than it bargained for as investors were willing to buy up to N624.50 billion worth of the debt note at the auction.

At the auction, investors demanded N80.75 billion worth of the 5-year bond against the N50 billion on offer, while a total of N201.98 billion subscription was received for the N50 billion on offer for the 10-year paper.

Also, investors demanded N341.77 billion worth of the 30-year bond against the N55 billion put on offer at the auction by the debt office.

However, the debt office sold N29.30 billion worth of the 5-year bond, N106.39 billion of the 10-year paper and N274.30 billion worth of the 30-year debt.

Early in the year, the debt office said it will borrow between N420 billion and N510 billion in the first quarter of this year through issuance of domestic bonds.

The country’s debt managers have almost covered the entire projection for debt issuance in the first three months of the year at one auction.

At Wednesday’s auction, yields fell across board with the 5-year tenor paper attracted 9.85 percent, down from 11 percent it was sold at the previous auction, the 10-year paper was sold at 11.12 percent against 12 percent previously while the 30-year tenor paper was sold at 12.56 percent compared with 13 percent at the last auction.

Fixed income dealers said the fall in yields reflects the market trend after the central bank barred individual from participating at its Open Market Operations (OMO) debt auction and government decision to cut costs of borrowing.

They also said appetite for fixed income has been buoyed by high liquidity in the banking system.

Nigeria sell bonds at a regular monthly auction as part of measures to raise fund to finance budget deficits and also help manage liquidity in the money market.