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FG to raise N80bn in 2020, 2024 bonds

By on October 9, 2015

The Federal Government is planning to issue N80bn ($400m) worth of local currency denominated bond with maturities range between five and 10 years on October 14, the Debt Management Office has said.

The DMO said on Wednesday that it would issue N40bn each in the debt maturing in 2020 and 2024, respectively at yields to be determined through Dutch Auction System.

All the bonds are re-openings of previous issues and results for the auction are expected the following day.

Last week, the DMO said it was planning to re-issue its five- and 10-year bonds in the last quarter of the year to raise up to N270bn after JP Morgan’s index delisted half of the maturities belonging to Nigeria.

The 10-year bond, among those to be delisted on the influential index, rose to yield 15.09 per cent after the DMO released its calendar indicating that it would re-introduce the benchmark paper, which was not issued in the third quarter.

The DMO said it would sell between N60bn and N90bn each in five- and 10-year bonds in each of the remaining three months of the year as re-openings of outstanding maturities.

JP Morgan had removed half of Nigerian bonds listed on its emerging markets bond index, as part of its month-end index rebalancing, cutting the nation’s weight to 0.79 per cent.

The United States bank had warned Nigeria this month that it would drop it from its index, citing a lack of liquidity and currency restrictions.

The 2024 bond to be issued from October will pay a coupon of 14.20 per cent while the 2020 paper will pay 15.54 per cent.

 

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