Friday, 4 November 2011
Nigeria: Government bond sale
In November and December, the debt office will discontinue the issuance of 3- and 5-year papers and concentrate on the 10-year instruments. The DMO said it would sell about N30 to N40 billion in the 10-year paper, with a term-to-maturity of 6.5 years and between N25 and N35 billion in the 10-year bonds with term to maturity of 7 years and 11 months in each of November and December.
The DMO explained that the discontinuation of the 3- and 5-year papers came as a result of advice from investors and bond dealers to reduce competition between the primary market and secondary trading of the papers. According to an unnamed official, the DMO was also dissuaded from issuing 20-year bonds, in order to encourage active transition in the secondary markets. All the bonds on offer are re-openings of previous issues.
Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance, and fund its budget deficit.
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