By Modupe Gbadeyanka
The Debt Management Office (DMO) has announced a revised calendar for the issuance of Federal Government of Nigeria (FGN) bonds for Q2 2020.
The debt office, in a circular released this week, said it was increasing the value of the Naira denominated papers to be sold to investors for the second quarter of the year.
The action followed the approval of the conversion of the $2.36 billion external loan to N850 billion domestic loan by the two chambers of the National Assembly recently.
The Senate had first authorised President Muhammadu Buhari to borrow the amount locally. This week, the House of Representatives also approved the same request.
The reason for abandoning the foreign borrowing for the local borrowing was because of the global economic crisis caused by the novel coronavirus disease.
According to the circular obtained by Business Post, the DMO said the changes made to the earlier released calendar would take effect from next month.
In the earlier released circular, the debt office had planned to raise between N30 billion and N60 billion on May 20, 2020 across three maturities and between N15 billion and N45 billion on June 24, 2020 across three tenors of 5 years, 15 years and 30 years.
But in the revised calendar, while the debt office will go ahead to sell the same amount of bonds it planned for next week, it increased the amount for next month.
In the new notice, it said bonds worth between N135 billion and N165 billion would be offered for sale on June 17, 2020 across three tenors.
The debt office further said all the notes are re-opening, meaning that the term-to-maturity of the 5-year bond for next week is 2 years and 11 months, the 15-year paper is 14 years and 10 months, while the 30-year note is 29 years and 10 months.
For the June 17, 2020 exercise, the term-to-maturity of the 5-year bond is 2 years and 10 months, the 15-year paper is 14 years and 9 months, while the 30-year note is 29 years and 9 months.
Meanwhile, the DMO said it is not changing the coupon rates for the bonds. The rate for the 5-year, 15-year and 30-year bonds were left at 12.75 percent, 12.50 percent and 12.98 percent respectively.
Adedapo Adesanya