The Debt Management Office plans to sell N83.91bn ($515.26m) worth of sovereign bonds ranging between five and 10 years at its regular auction on June 27.The debt office on Thursday said in a statement that it would sell N30bn each in five-year and seven-year paper, while it plans to auction N23.91bn worth of the 10-year instrument.

According to the statement, two of the bonds, the five-year and 10-year, are re-opening of previously issued ones, while the seven-year paper is a fresh issue.

The five-year bond has a term-to-maturity of four years and 10 months, while the 10-year will mature in nine years and seven months time.

“The DMO reserves the right to alter the amount allotted in response to market conditions,” it said.The DMO, last month, sold N70bn ($440.31m) worth of five-year and 10-year bonds maturing in 2017 and 2022 at its regular auction on Wednesday.

The debt office had said it sold N35bn each in five-year and 10-year paper with maturities of four years, 11 months and nine years, eight months, respectively.

According to DMO, the bonds are due to mature in 2017 and 2022, respectively, and are re-opening of previous issues.

The 2017 bond has a coupon of 15.24 per cent, compared with 15.1 per cent at the last auction in April, while the 2022 paper pay a rate of 15.45 per cent against 15.47 per cent previously.

Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

Meanwhile, Fitch Ratings, a global rating agency, has withdrawn Rivers State proposed maximum N150bn five-year fixed rate bond a Long-term local currency ‘B+(EXP)’ and National Long-term ‘AA-(nga)(EXP)’expected ratings. The bond was scheduled to be issued between the end of 2011 and beginning of 2012.

Reuters reported that Fitch had withdrawn the ratings because the forthcoming debt/transaction was no longer expected to convert to final ratings as the issuer had not yet finalised the bond documents.

Rivers State is rated Long- term foreign and local currency rating ‘B+’ with positive outlooks and National Long-term rating ‘AA-(nga)’ with a stable outlook.

The state is located in the south of Nigeria with a population of 5.6 million inhabitants, accounting for about four per cent of the national total. However, the state is one of the richest in the country due to the concentration of oil production. Per capita GDP is about NGN700, 000 ($4,500).

Source: Punch