Debt Office to Open N80bn Bonds for Subscription
Nigeria’s Debt Management Office (DMO) is scheduled to open N80 billion worth of local bonds for investors subscriptions at the primary market auction on Monday, according to details from its offer circular.
The auction is expected to be oversubscribed, reflecting sustained demand for government borrowing instruments. Analysts said strong appetite for naira assets will afford another spot rate reduction on FGN bonds at the auction, supported by disinflation.
The authority has continued to reduce the amount raised from the local debt capital market since the beginning of the year. The shift reflects the removal of subsidy and improved government earnings in addition to some external borrowings.
The lower bond supply via primary market operations amidst rising demand from banks, pension fund administrators, and other institutional investors has forced rates and yields downward sharply.
At the primary market on Monday, the authority planned to reopen its 5-year and 7-year bonds, with analysts projecting reduced spot rates on the offers. The market has seen a shift in spot rates pricing at the Nigerian Treasury bills auction, and analysts have maintained consensus that the DMO is more likely to reduce rates on the local bonds.
The auction circular highlights that N80.00 billion will be offered through the reopenings of the APR-2029 bond and JUN-2032 bonds.
“Our expectation for the auction is that marginal rates will taper. We reiterate our medium-term expectation of a moderation in bond yields, influenced by the anticipated dovish monetary policy stance and demand and supply dynamics,” Cordros Securities Limited said.
Fixed income market analysts at AIICO Capital Limited project stop rates within the range of 15.65%–15.95% for the 2029 paper and 15.90%–16.15% for the 2032 paper Nigerians in Diaspora Remit $20.92bn Home in 2024 – Tinubu
