By Ademola Alawiye

The Debt Management Office said on Thursday that it sold N70bn ($452.5m) in five-year and three-year sovereign bonds at its fourth debt auction of the year.

The debt office, in a statement on its website, said it sold N35bn each in the five-year and three-year instruments at an auction on Wednesday, with marginal rates of 12.14 per cent and 13.19 per cent respectively, higher than previous yields recorded in the March auction.

The statement said, “Both papers were a reopening of the previous issue. However, the original coupon rates of 10.50 per cent and four per cent for the three-year and five-year offers respectively will be maintained.”

The five-year bonds were issued at a marginal rate of 12 per cent last month, while the three-year paper was issued at 10.50 per cent.

Total subscription stood at N129.22bn compared to N102.27bn last month.

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 had earlier said that it planned to sell N70bn in three-year and five-year sovereign bonds.

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

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.

Source: Punch