By Agency Reporter

Friday, 18 Feb 2011

The Debt Management Office said on Thursday, that it sold sovereign bonds worth N66.5bn at its second debt auction of the year.

Reuters reported on Thursday that the debt office sold N30bn in five-year and N36.5bn in three-year instruments at Wednesday’s auction with marginal rates of 11 per cent and 9.25 per cent respectively.

This, according to the DMO, was slightly lower than the yields at its previous auction in January.

The five-year bonds were issued at a marginal rate of 11.13 per cent last month, while the three-year instruments were issued at 10.40 per cent.

“However, the original coupon rates of 5.50 per cent and four per cent for the three-year and five-year respectively, will be maintained,” DMO said.

Both instruments were first issued in 2010 and have since been reissued on a monthly basis.

Total subscription stood at N140bn compared to N137.45bn last month.

Traders attributed the increase in subscription to the release on Monday of budgetary allocations to the three tiers of government from federation accounts.

Meanwhile, the Central Bank of Nigeria said that it planned to sell N48bn in treasury bills next week.

This according to the regulator, is in an effort to curb inflation and help banks to manage their liquidity.

The bank said on Thursday, that it will sell N47.65bn in 91-day and 182-day treasury bills next.

It also noted that it would auction N17.65bn in 91-day bills and N30bn in 182-day bills using the Dutch Auction System.

The result, according to CBN, would be released the following day.

The regulator issues treasury bills regularly as part of monetary control measures.

The central bank has said that reduction of headline inflation to below 10 per cent remains a priority.

The country’s headline inflation stood at 12.1 per cent year-on-year in January and has been in double-digits for more than a year.

The apex bank had said it would issue N39.27bn in 91-day bills, N40bn in 182-day bills and N30bn in 364-day bonds early this month, using the Dutch Auction System.

Traders had said liquidity from budgetary allocations last month has thinned out, but expected the offer to be oversubscribed due to improving yields after the central bank raised its key interest rate to 6.50 per cent from 6.25 per cent a week ago.

 

Source: Punch