DMO sells N120bn worth of bonds, as reserves decline

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Nigeria Debt Management Office (DMO) Logo.

Nigeria issued N120 billion worth of naira-denominated bonds maturing in 2020 and 2024 at an auction on Wednesday, at lower yields than the returns at its previous auction, even as the external reserves of the country drop by 0.86 per cent within the first 12 days of October.

The returns on the paper reflected the prevailing low yields on local bonds at the secondary market.

According to the Debt Management Office N40 billion was raised in the 2020 debt at 13.11 per cent compared with 15.95 per cent at the previous auction in August.

The same tenor bond closed at 13.28 per cent at the secondary market on Wednesday. A total of 80 billion of the benchmark bond maturing in 2024 was issued at N13.87 billion compared with 16.84 per cent the same tenor debt attracted at the March auction when it was last issued.

The 2024 paper closed at 13.71 per cent at the secondary market on Wednesday. Yields on Nigerian debt have dropped sharply since last month due to increased naira liquidity in the banking system, spurring demand for the local bond by pension and commercial lenders.

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