The DMO said there will be re-openings of the 14.5 per cent FGN JUL 2021 five year paper, 12.5 per cent JAN 2026 10 year paper and 12.4 per cent MAR 2036 20 year bond. The debt office hopes to raise N40 billion each from the five and 20 year papers.
It also plans to raise N30 billion from the 10-year paper next week Wednesday August 17, 2016. Settlement of the auctioned bond will be on Thursday, August 18, 2016. The Central Bank of Nigeria (CBN) had on Tuesday said it will no longer allow banks to access its Standing Lending Facility (SLF) on the settlement date for the payment of government securities which they bought.
At the last bond auction, there had been a lower level of over subscription with the highest investors’ interest in the longer tenured bond. The 20 year bond which was a reopening was oversubscribed to the tune of N105.31 billion, far above N40 billion which the debt office had targeted at the July auction.
It eventually sold N55 billion worth of the 12.4 per cent MAR 2036 paper at 14.983 per cent. The five year 14.5 per cent JUL 2021 and 10 year JAN 2026 papers were over-subscribed to the tune of N63.15 billion and N63.3 billion.
The DMO, however, sold less than the N40 billion which it had hoped to raise for each of the two bonds, having sold N30 billion of the five year paper at 14.5 per cent and N35 billion of the 10 year paper at 14.9 per cent.
Earlier this week, the DMO had called for bids from international managers and local advisers in preparation for the $1 billion Eurobond issuance which is part of the $4.5 billion that Nigeria hopes to raise in two years. President Muhammadu Buhari had approved a budget of N6.1 trillion with a deficit of N2.2 trillion which the government hopes to fund through borrowing.