Nigeria reaps slight over $288m from bond auction to lace budget

Debt Management Office. Photo: The Guardian Nigeria

Addis Ababa, Ethiopia (ADV) – Nigeria’s Debt Management Office (DMO) has announced that it has reaped about N88.08 billion, approximately $288.786m from the October 2018 bond auction to fund the 2018 budget.

The bonds were auctioned on Wednesday in three tenors of five, seven and 10 years, DMO said in a statement monitored by ADV on Saturday.

A total of N115 billion worth of shares was initially offered to be bought but only N88.08 billion was allotted, though subscribers made bids worth N143.48 billion.

According to the auction results, investors showed a strong preference for the 10-year re-opening bond with a total subscription of N102.08 billion compared to the N45 billion that was offered.

However, N55.29 billion was allotted.

It added that the Federal Government bonds at the auction were allotted at 12.75 percent for the five year, 13.53 percent for the seven year and 13.98 percent for the 10-year bond.

The African Press Agency correspondent in Nigeria quoted local media reports quoted the DMO as saying that out of the N35 billion offered for the five year bond, subscriptions to the value of N16.50 billion were received, while only N12.65 billion was allotted.

For the seven year paper, N24.90 billion subscriptions were received for the N35 billion on offers, however, N20.14 billion was allotted.

It noted that of the three tenors, only the 10 year paper had allotments beyond what was originally offered.

The Nigerian government, through the DMO, resorts to the issuance of sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

© Bur-csa – N.W / From our regional correspondent Tamba Jean-Matthew III – African Daily Voice (ADV)