Nigeria Raises 95 Bln Naira in Local Currency Bond, Yields Mixed

Nigeria raised 95 billion naira ($312.50 million) at an auction of local currency bonds on Wednesday, with the 2021 maturing debt attracting higher yield, while the 2026 and 2036 paper fetched lower returns, data from the Debt Management Office showed on Thursday.

The debt office sold 10 billion naira of 2021 paper at 15.29 percent at Wednesday’s auction, compared with 15.14 percent at the previous auction last month. The debt office had initially offered 35 billion naira of the 5-year bond

It also sold 45 billion naira of 2026 debt at 15.47 percent, lower than 15.53 percent, and 40 billion naira of 2036 debt at 15.48 percent, compared with 15.59 percent.

The debt office sold more than the initially advertised amount of 35 billion naira apiece for the 2026 and 2036 paper at the auction.

Investors had demanded yields ranging between 12-17 percent for all the debt on offer, but the debt office was not willing to pay more for the debt, one trader said.

The West African nation has said it would borrow about 900 billion naira locally to finance part of the 2.2 trillion-naira deficit in its 2016 budget, to plug shortfalls.

Nigeria issues local bonds as part of measures to finance the government budget deficit and also to help manage liquidity in the banking system ($1 = 304 naira)


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