FG seeks N225bn new bonds from investors


The federal government held its regular primary auction of new bond issuances on Monday in order to raise another N225 billion from the domestic capital market.

However, the outcome of the auction was unknown at the time of publication.

Investment firms increased their pre-auction marketing efforts for the new issuances over the weekend, with tallies surveyed across many firms indicating that the new issuances may be oversubscribed.

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In the last two months, the government has raised over N450 billion from the domestic capital market through bond issuances.

The prospectus issued by the Debt Management Office (DMO), which oversees the federal government’s debt issuances and management, stated that the government would raise N225 billion by reopening three previously issued mid-to-long term bonds.
The bonds being reopened include the 13.53 per cent 10-year bond, which matures in March 2025. Also being reopened is the 10-year, 12.50 per cent bond, which matures in April 2032 and the long-term 20-year bond with initial coupon of 13.00 per cent and maturity date of January 2042. The previous stop rates for the bonds are 11.00 per cent; 13.00 per cent and 13.749 per cent respectively.

The government plans to raise N75 billion each from the three bonds, totaling N225 billion. Nigeria depends on regular debt issuances to finance budget deficits as poor infrastructure and insecurity continue to threaten government’s revenue.

The DMO had reported that Nigeria’s total public debt stock increased to N41.6 trillion or $100.07 billion by the end of first quarter 2022, 5.16 per cent or N2.04 trillion increase on N39.56 trillion or $95.78 billion recorded as at December 31, 2021.

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