FG to raise N135bn through bonds next week

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The Federal Government of Nigeria has concluded all plans to raise a total sum of N135 billion ($442.62 million) through bonds next Wednesday, August 23.

The Nigerian government, through its Debt Management Office (DMO), disclosed that it will sell N35 billion of bonds due in 2021 and N50b each of bonds due in 2027 and in 2037, using a Dutch auction system.

The debt office noted that settlement is expected two days after the sale, while the bonds are re-openings of previous issues.

Meanwhile, continued fund raising by the CBN, and thus indirectly the Federal Government, has left the private sector crowded out of the market, and having to borrow at high interest rates.

According to the FMDQ half year report, foreign exchange derivatives stood at N7.930 trillion ($25,365,000,000) between January to June this year, while Treasury Bills accounted for N31.309tr ($100,348,000,000b).

Also, FGN Bonds Turnover from January to June 2017, stabilsed at N5.353b ($17,169,000,000), but recorded N1.631b ($5m) on Other Bonds in the second quarter of this year.

The data, extracted from the report indicated that Eurobonds made during the quarter under review was N51.347b ($164m), while Repurchase Agreements/Buy-Backs steadied at N15.734tr ($5b).

The West African country expects a budget deficit of 2.36 tr naira this year, as it tries to spend its way out of a recession. It expects to raise money to cover more than half the deficit from the local market.

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