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Nigeria to Offer $428 Million Naira in 3-yr, 5-yr Bonds

Nigeria Today
3/26/08

Nigeria will offer 50 billion Naira ($428.26 million) in 3-year and 5-year bonds on Wednesday in its third auction this year, the Debt Management Office (DMO) said on Tuesday. The DMO said it will auction 30 billion Naira in 3-year bonds and 20 billion Naira in the 5-year instrument at par. The coupon rates for the bonds, which have the same maturity date as those sold in January and February, will be determined at the auction, the DMO said.

"For re-openings of previously issued bonds, where the coupon is already set, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus accrued interest from the original issue date," the DMO said in a public notice. The debt instruments sold at the two previous auctions carried the same yields -- 8.99 percent for the 3-year bonds and 9.45 percent for the 5-year paper. Nigeria, which raised a total of 591.81 billion naira from bond issuance in 2007, is yet to release an auction timetable for this year.

Nigeria issues two types of bonds, one by the central bank to manage money supply, and the other by the DMO to restructure Nigeria's domestic debt put at 1.9 trillion Naira as at September and fund part of its budget deficit. The broad money (M2) of sub-Saharan Africa's second biggest economy grew by 30 percent in 2007 compared to the 19 percent target for the whole year.

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