Nigeria sold 85.83 billion naira ($431 million) in naira-denominated bonds maturing in 2020 and 2026 at an auction on Wednesday, paying higher yields than at the auction held in December, the Debt Management Office (DMO) said on Thursday.
The debt office said it sold 40 billion naira of 2020 paper at 12.24 percent compared with 10.95 percent at last month’s auction, while it issued 35 billion naira at par in the 2026 debt with a return of 12.50 percent. An additional 10.83 billion naira of the 2026 paper was allotted on a non-competitive basis to mandate investors, the debt office said.
The 2020 debt is a reopening of a previously issued bond, while the 2026 debt is a fresh issue. Demand totalled 149.43 billion naira against 145.78 billion naira at the last auction.
The debt office last week proposed a plan to issue 260 billion to 390 billion naira in 5-, 10- and 20-year naira bonds in the first quarter of the year.
Nigeria, Africa’s biggest economy issue local bonds as part of measure to finance government budget deficit and also help to manage liquidity in the banking system.
Nigeria said it will borrow about 900 billion naira locally to finance part of the 2.2 trillion naira deficit in its 2016 budget.
