Nigeria to auction $389mn worth of 2016, 2024, 2034 T-bonds on Nov 12

By bne IntelliNews November 6, 2014

Nigeria will offer a total of NGN65bn ($389mn) worth of three government bond issues at a domestic auction on November 12, the country’s Debt Management Office (DMO) said. The bonds are re-openings of previous issues.

DMO plans to sell NGN10bn of the originally three-year notes that mature on August 16, 2016 and carry an annual coupon of 13.05%, NGN30bn of the 10-year bond, which matures on March 14, 2024 and bears an annual coupon of 14.2%, and NGN25bn of the 12.15%-coupon 20-year bond, maturing in July 2034.

At its latest auction on October 15, the DMO sold NGN18.61bn of the 2016 papers at a yield of  12.14%, up from 11.49% in September, NGN30bn of the 2024 bond at a yield of 12.79%, up from 12.232% in September, and NGN25bn of the 2034 bond at a yield of 12.699%, up from 12.299% in September. Bids worth a total of NGN116.31bn were placed last month, down 34% from a month earlier.

Through its monthly government bond sales, the DMO aims to strengthen the domestic bond market, create a benchmark for corporate and municipal issuances and fund the federal government’s budget deficit.

Foreign investors’ interest in Nigeria’s bond market got a boost when JP Morgan added Nigeria to its local currency government bond index in October 2012, making it the second African country after South Africa to be included in a widely followed index. On August 29, 2014, JP Morgan included Nigeria's 2024 bond to the Government Bond Index-Emerging Markets (GBI-EM), in addition to the 2014, 2019 and 2022 bonds that were added in 2012. Barclays also added Nigerian central government debt to its index from March 2013.

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