DMO to Issue N90b FGN Bonds at Higher Stop Rates

By Dipo Olowookere

The Debt Management Office (DMO) will be expected to issue bonds amounting to N90 billion this week, Business Post is reporting.

A breakdown of the anticipated exercise showed that the debt office will sell the 12.75 percent FGN APR 2023 paper (5-Yr Re-opening) worth N25 billion, 13.53 percent FGN MAR 2025 note (7-Yr Re-opening) worth N25 billion and 13.98 percent FGN FEB 2028 paper (10-Yr Re-opening) worth N40 billion.

According to analysts at Cowry Asset, “We expect the bonds to be issued [by the DMO] at higher stop rates.”

Also at the secondary market, “we expect FGN bond prices to rise (with corresponding decrease in yields) at the OTC market amid expected ease in financial system liquidity.”

Last week, the value of the FGN bonds traded at the over-the-counter (OTC) segment moved in different directions across maturities tracked: the 20-year, 10 percent FGN JULY 2030 debt and the 10-year, 16.39 percent FGN JAN 2022 debt decreased by N0.20 and N0.17 respectively.

Their corresponding yields rose to 14.12 percent from 14.07 percent and 13.74 percent from 13.69 percent respectively.

However, the 7-year, 16.00 percent FGN JUN 2019 debt and the 5-year, 14.50 percent FGN JUL 2021 debt increased in value by N0.69 and N0.06 respectively with their corresponding yields falling to 12.47 percent from 13.31 percent and 13.56 percent from 13.59 percent respectively.

Meanwhile, the value of the FGN Eurobonds traded on the London Stock Exchange (LSE) declined for all maturities tracked; the 10-year, 6.75 percent JAN 28, 2021 bond, the 10-year, 6.38 percent JUL 12, 2023 note and the 15-year, 6.50 percent NOV 28, 2027 paper lost $0.04, $1.59 and $0.21 with their corresponding yields rising to 5.12 percent from 5.11 percent, 6.10 percent from 7.55 percent and 7.13 percent from 7.98 percent respectively.