FG Raises N69.2b From 2016 Last Debt Auction

By Modupe Gbadeyanka

Federal Government on Wednesday, December 14, 2016, at the last debt auction for the year, realised a total of N69.2 billion from the local bond market, far below the N95 billion it had planned to raise from the exercise.

At the Naira denominated auction, investors demanded for yields of up to 18 percent for the notes, well above the mid-point the Debt Management Office (DMO) initially thought of issuing them on behalf of the government.

However, data obtained by Business Post from DMO’s website on Thursday revealed that the total subscription at Wednesday’s auction stood at N102.84 billion.

Also from the data, it was observed that the FG got N3.20 billion from 2021 paper at 14.50 percent with a maturity of 4 Years, 7 Months (July 15, 2021). The settlement date for this bond is December 16, 2016.

The debt office had initially offered to sell N35 billion in this segment, but it did not attract investors ostensibly due to concerns over rising inflation.

However, the 20-year bond maturing on March 18, 2036, was investors’ delight. The DMO sold N41 billion of the 2036 paper at 12.40 percent at the auction yesterday and were received from 49 successful bids. Government had initially offered N35.00 billion for these notes.

Likewise, Nigeria raised N25 billion from the advertised 10-year bond at 12.50 percent maturing on January 22, 2026 from 33 successful bids. The DMO offered N25 billion for this segment.

The Nigeria’s data office noted that successful bids for the 14.50 percent July 2021 paper, 12.50 percent January 2026 paper and 12.40 percent March 2036 were allotted at the Marginal Rates of 15.9900 percent, 16.2400 percent and 16.4348 percent, respectively.

However, it said the original coupon rates of 14.50 percent for the 14.50 percent July 2021 paper, 12.50 percent for the 12.50 percent January 2026 paper, and 12.40 percent for the 12.40 percent March 2036 paper will be maintained.