FG seeks N225bn new bonds from investors

The federal government Monday conducted its regular primary auction of new bond issuances to raise additional N225 billion from the domestic capital market.

The result of auction was however not known as at press time.

Investment firms at the weekend doubled up efforts at pre-auction marketing of the new issuances with tallies surveyed across many firms indicating that the new issuances may be oversubscribed.

The government had in the past two months raised more than N450 billion from the domestic capital market through bond issuances.

Prospectus issued by the Debt Management Office (DMO), which oversees federal government’s debt issuances and management, indicated that the government would be raising N225 billion through reopening of three previously issued mid-to-long term bonds.

The bonds being reopened include the 13.53 per cent 10-year bond, which matures in March 2025. Also being reopened is the 10-year, 12.50 per cent bond, which matures in April 2032 and the long-term 20-year bond with initial coupon of 13.00 per cent and maturity date of January 2042. The previous stop rates for the bonds are 11.00 per cent; 13.00 per cent and 13.749 per cent respectively.

The government plans to raise N75 billion each from the three bonds, totaling N225 billion. Nigeria depends on regular debt issuances to finance budget deficits as poor infrastructure and insecurity continue to threaten government’s revenue.

The DMO had reported that Nigeria’s total public debt stock increased to N41.6 trillion or $100.07 billion by the end of first quarter 2022, 5.16 per cent or N2.04 trillion increase on N39.56 trillion or $95.78 billion recorded as at December 31, 2021.

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