Nigeria realises $409m from sovereign bonds' sale, says DMO

THE nation has raked-in N65 billion ($409.45 million) from the sale of its 10-year sovereign bonds, at yields 150 basis points lower than its previous auction in October, the Debt Management Office said yesterday in Abuja.Specifically, the country realised N35 billion from the 10-year papers due to mature in 2018 and N30 billion in the 10-year papers maturing in 2019, at its 11th monthly debt auction, held yesterday. All the papers were re-openings of previous issues.The 10-year papers were all sold at a 16.50 per cent marginal rate. The country issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.The 10-year papers attracted 18 per cent marginal rate at the last month's auction, reflecting the hike in central bank's benchmark interest rate. Rates have however, come down to reflect greater liquidity in the market.'Market is coming back in terms of pricing as increased liquidity in the system helped boost interest in the papers,' an official of the debt office told an international agency yesterday.The Central Bank had raised its benchmark rate far further than analysts expected last month by 275 basis points to 12 per cent and hiked cash reserves requirement to 8.0 per cent from 4.0 per cent in a move to tighten liquidity and help curtail demand for foreign exchange.The hike led to rapid increase in yields across the board on fixed income assets, but pricing is gradually reversing to reflect greater liquidity in the market from budget disbursal to the three tiers of government, traders said.Total subscription at yesterday's auction was N157.72 billion, reflecting the prevailing liquidity in the system.'The original coupon rates of 10.70 per cent for the 10-year offers will be maintained,' the debt office said in a statement.
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