DMO to Sell N360Bn Bond in Q1

Debt Management Office (DMO) on Wednesday said that it planned to raise between N210 and N360 billion in sovereign bonds from five years to 20 years in the first quarter of 2013.


It said in a statement that the amount being proposed was higher than its 2012 fourth quarter debt issuance and the debt issued in the corresponding period of last year.


The DMO had issued N209.76 billion worth of FGN Bonds in the first quarter of 2013 – all in 10 years bonds to reduce funding pressure on the Federal Government.


It, however, auctioned between N160 billion and N240 billion in five and 10 years sovereign bonds for the fourth quarter of 2012.

Explaining further, the DMO said it planned to auction between N85bn and N135bn each in five-seven and 10 years paper on January 23.


It added that it would auction between  N75 billion and N135 billion in five, seven, 10 and 20 year paper on February 13 and sell between N50 billion and N90 billion each in five and 10 years bonds on march 13.


All the bonds, according to DMO, are re-opening 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.


Nigeria was included in the JP Morgan’s Government Bond Index for emerging markets on October 1, spurring an initial rapid fall in yields in local bond as investors took positions.


The inclusion in the JP Morgan index is expected to attract about $1.5bn in offshore investment in the local bond market.


Owing to the country’s escalating debt profile, financial analysis have warned the Federal Government to keep an eye on the country’s debt position.


Analysis at First Securities Discount House, in their half year report on the economy, said “FSDH Research maintain that there is the need for the FG to closely monitor the country’s current debt position, to ensure that it does not surpass the debt to GDP ratio of 25 per cent.


“More importantly, the country’s economic managers need to ensure that all debts contracted are used to promote economic growth and development via the build-up of infrastructure and provision of employment opportunities.