Business and EconomyLocalNews
FG set to borrow $527.9m in bonds, May 11 – DMO; as CBN rakes in N150.6bn in Treasury bills sale
The DMO said on Wednesday that it would sell N50bn of a bond maturing in 2036, N40bn of paper maturing in 2026 and N15bn of debt maturing in 2020, using the Dutch auction system.
The DMO issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund the budget deficit.
The debt office is planning to borrow about N900bn locally to finance part of the N2.2tn deficit in the 2016 budget.
Director-General, DMO, Dr. Abraham Nwankwo, had said the slump in crude oil prices in the international market made a deficit budget inevitable this year, adding that the DMO was prepared to borrow on behalf of the government to fund the deficit.
Nwankwo dismissed the fears in some quarters that the government might not be able to borrow from the bond market to finance any shortfall in the budget because of the delisting of Nigeria from the JPMorgan Bond Index.
Meanwhile, the Central Bank of Nigeria (CBN) has sold a total of N150.6bn worth of Treasury bills at higher yields, as indicated by data from the bank.
Yields on the short-dated treasury bills rose marginally at an auction, Wednesday, where the CBN sold a total of N150.6bn worth of debt with maturities ranging between three months and one year.
The bank said it sold N45.17bn of three-month paper at 7.99 per cent yield, compared with 7.88 per cent at the last auction on April 20.
A total of N23.43bn worth of the six-month Treasury bill was sold at nine per cent against 8.99 per cent at the previous auction, while N82bn of the one-year Treasury bill was sold at 11.05 per cent compared with 10.24 per cent previously.
Investors demanded a total of N261.52bn against N253.19bn subscription at the last auction, Reuters reported.
The CBN had said it was planning to borrow N1.07tn via Treasury bills issuance in the second quarter of 2016.
The CBN said it would auction N303.77bn worth of 91-day bills, N169.98bn worth of 182-day paper and N599.63bn of one-year paper between March 17 and June 2.
The Federal Government, through the CBN, had raised N1.22tn from treasury bills in the first quarter.
