By Ademola Alawiye

The Debt Management Office on Wednesday said that it planned to sell N70bn in three-year and five-year sovereign bonds next year.

The debt office said it would, in its fourth debt auction of the year, sell N35bn each of the three-year and five-year bonds.

It added that both papers were re-openings of previous issues and would mature in 2014 and 2015 respectively.

DMO issues sovereign bonds on a monthly basis as part of measures to finance the national budget deficit, curb inflation and control money supply.

The debt office in its third auction for the year sold N60bn ($383.3m) in five-year and three-year sovereign bonds.

It sold N30bn each of the five-year and three-year paper with marginal rates of 12 per cent and 10.50 per cent, respectively.

The five-year bonds were issued at a marginal rate of 11 per cent, while the three-year papers were issued at 9.25 per cent.

The three-year paper is a new issue, while the five-year paper is a re-opening of the previous issue.

The yields of the sovereign bonds edged higher than the previous auction in February.

The debt office had said, “The original coupon rates of four per cent for the five-year will be maintained, while the coupon rate for the three-year is set at 10.50 per cent. Total subscription stood at N102.27bn compared to N140bn last month.”

Analysts said that unrelenting pressure on Nigeria’s Naira currency, which hit its weakest level against the dollar in more than 18 months last month due partly to political uncertainty, could spur a general increase in prices for an import-dependent economy struggling to rein in inflation at below 10 per cent.

 

 

Source: Punch