Nigeria plans to raise 110 billion naira in local currency denominated bonds on August 17, the Debt Management Office (DMO) said on Thursday.
The office said it would sell 40 billion naira of a bond maturing in 2036, 30 billion naira of paper maturing in 2026 and 40 billion of debt maturing in 2021, using the Dutch auction system.
According to a Reuters News Agency report, Results of the auction are expected to be released on the following day.
All the bonds on offer are reopenings of previous issues.
Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
Africa’s top crude exporter plans to borrow about 900 billion naira locally to finance part of the 2.2 trillion naira deficit in its 2016 budget. It is also seeking advisers and bookrunners to manage a planned $1 billion Eurobond sale this year.
Lagos Parallel Market Naira Rates Thursday: 394/$ USD, 505/£ GBP, 426/Euro
Meanwhile as emerging and frontier markets rebound, Nigeria’s fortunes might finally be picking up, according to Stuart Culverhouse and Alan Cameron at Exotix Partners.
The firm has just assigned a “Buy” recommendation on the country’s 12-month T-bills and added them to its top five picks of the bond world. Here’s why.
In the short space of six months, Nigeria has floated its exchange rate, reversed a policy of negative real interest rates and given investors a clear message that market-oriented policies are once again part of its long-term development plans.
Although it will take some time before credibility can be restored to levels before President Buhari took control of policy, the investment case is now re-opened – and for those willing to act early, quite compelling.
The magnitude of the changes since January is striking: the exchange rate has moved from being firmly fixed at 199 naira to the dollar, to freely floating at 318.50.
The policy rate, or MPR, has been raised by 3 percentage points to 14%.
Local T-bill yields have risen from a range between 0.7 and 8.8% to between 15.8 and 22.4%.
The spread between the official and parallel market exchange rates has halved from 44% to 22%, with a further narrowing to be expected.