FG Raises N160bn in First Quarter Auction

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James Emejo in Abuja with agency report
The Debt Management Office (DMO) disclosed yesterday it raised a total of N160 billion at its second auction of the year.
It said it realised N60 billion from the 14.50 percent coupon maturing July 2021 and N30 billion from the 12.50 percent offer maturing January 2026 as well as N70 billion from the 12.40 percent couple which matures March 2036.
According to information posted on the DMO website, though debt instruments worth N110 billion was auctioned. a total of N337.03 billion was subscribed and N160 billion allotted.
According to the auction results, respective successful bids were allotted at marginal rates of 16.55 percent, 16.61 percent and 16.77 percent.
However, original coupon rates of 14.50 percent, 12.50 percent and 12.40 percent will be maintained according to the debt management office.
Reuters, however reported that yields had been lower than the inflation rate, currently at 18.72 percent in January, its 12th straight monthly rise.
The debt office had initially wanted to raise N110 billion at the auction but increased the offer due to demand.
The government is also facing funding challenges brought on by the low price of oil. It expects the budget deficit to widen to N2.36 trillion this year as it tries to spend its way of out of the recession.
More than half of the deficit will be funded through local borrowings, the government has said.
The debt office said it raised N70 billion of the paper maturing in 2036 at 16.77 per cent, lower than 16.99 per cent same instrument fetched at the previous auction and paid 16.61 per cent for the N30 billion raised in the paper maturing in 2026 compared to 16.99 per cent at the previous auction.
It issued N60 billion in the note maturing in 2021 at 16.55 per cent against 16.89 per cent at the previous auction.
Nigerian government issues local currency bonds every month to raise funds to support its spending plan, which also goes to help the banking system manage liquidity.
DMO’s boss, Dr. Abraham Nwankwo earlier disclosed plan to float a savings bond targeted at small saver with shorter tenor and competitive interest.
This is expected to provide more revenue sources for government as well as provide opportunities for ordinary Nigerians to investment in the bond market which had long been dominated by institutional investors like pension funds.