DMO to borrow N130bn via bonds Jan. 18

The Debt Management Office (DMO) is planning to borrow N130bn ($426m) in local currency-denominated bonds on January 18, its first debt sale this year, the DMO has said.

The debt office said it would issue N40bn apiece in bonds maturing in 2021 and 2036, and N50bn of paper maturing in 2026, using the Dutch auction system.

Settlement for the bond sale is expected on the following day. All the bonds on offer are re-openings of previous issues.

The Federal Government issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

Last week, it said it was planning to issue between N340bn and N430bn worth of bonds during the first quarter.

The Federal Government has proposed a 2017 budget deficit of N2.36tn for this year, which it aims to fund by borrowing N1.254tn domestically and N1.067tn abroad.

The Central Bank of Nigeria is planning to sell N195.96bn ($644.08m) in short-dated Treasury bills at an auction on January 19, the CBN has said.

The central bank said it would sell N36.78bn in three-month debt, N39.17bn in six-month bills and N120bn in one-year notes, using a Dutch auction system. Payment will be due the day after the auction.

The country issues Treasury bills to fund its budget deficit, manage banking system liquidity and curb rising inflation.

The CBN had sold N172.85bn ($550m) at its first Treasury bill sale of the year on Wednesday last week with yields unchanged from the previous auction, held on December 21.

It sold N115.85bn of one-year debt at a rate of 18.68 per cent, the same as the previous auction, the fixed income traders said then.

They said the central bank also sold N35bn of 91-day paper at 14 per cent and N22bn of six-month bills at 17.5 per cent, unchanged from the previous auction.

Subscription at the auction came to N194.12bn, well up from N42.68bn at the previous auction.

The central bank had on December 21 raised N39.72bn ($130.57m) at a Treasury bill sale, with yields unchanged on the previous auction.

It sold N13.17bn of three-month paper at 14 per cent, the same yield as on December 14, and sold N26.55bn of six-month paper at an also unchanged 17.5 per cent.

The auction was sparsely subscribed with total demand of N42.68bn.

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