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Govt Sells $254.82 million in 5-year Bonds says DMO

28th April '08

Nigeria sold 30 billion naira of 5-year bonds at par at its fourth auction this year, the Debt Management Office (DMO) said on Friday. The DMO said subscription in the bonds totalled 57.99 billion naira, but it stuck to its initial offer of 30 billion. The debt office said it retained 9.45 percent as the coupon rate for the instrument because it was a re-opening of the paper issued last month.

"Successful bids for 5-year offer were allotted at the marginal rates of 9.65 percent, but will maintain their original coupon rate of 9.45 percent," the debt office said. The DMO is yet to release its bond auction calendar for the year, but has resorted to re-opening previously offered paper since January. Nigeria, sub-Saharan Africa's second largest economy, issues long-term bonds monthly as part of measures to restructure its short-term treasury bills to long tenored ones and also fund part of its budget deficit estimated at 2.5 percent of its GDP. The domestic debt of Africa's top oil producer stood at 1.9 trillion naira at the end of 2007. Bankers said Nigerian bonds remain the toast of foreign investors and local fund managers because of their attractive yield compared to other emerging market instruments.

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