DMO to Issue ₦150 Billion Bonds amid Demand Pressure
Amid demand pressure in the fixed income market, the Debt Management Office (DMO) will issue bond worth ₦150 billion this week. Despite the fact that government securities attract low yield currently below inflation, demand for fixed income instrument has been quite high.
Analysts attribute the development to lack of alternative investment windows that provide better return, couple with the fact that there is excess liquidity in the financial system. Read Also: FBNH: We Want To Regain Our Leadership in Banking Sector – GMD
The breakdown of the bond by class indicates that ₦105 billion worth are to be re-issued while a ₦45 billion new issue will support the bucket.
Analysts explained that the total bond to be issue this week include 10-year re-opening 12.5% APR 2026 worth ₦25 billion.
In addition, DMO will issue 15-year re-opening bond 12.50% FGN APR 2035 worth ₦40 billion, a 25-year new issue FGN JUL 2045 worth ₦45 billion and 30-year re-opening 12.98% FGN APR 2050 worth ₦40 billion respectively.
In the just concluded week, the values of FGN bonds traded at the over-the-counter (OTC) segment moved in mixed directions across maturities tracked.
Specifically, the 5-year, 14.50% FGN JUL 2021 bond and the 7-year, 13.53% FGN MAR 2025 note moderated by N0.57 and ₦2.35 respectively, their corresponding yields climbed to 3.17% (from 2.81%) and 6.44% (from 5.96%) respectively.
However, the 10-year, 16.29% FGN MAR 2027 debt and the 20-year, 16.25% FGN APR 2037 debt gained N0.45 and ₦4.69 respectively, their corresponding yields fell to 7.82% (from 7.91%) and 9.43% (from 9.84%) respectively.
Analysts at Cowry Asset Limited stated that the value of FGN Eurobonds traded at the international capital market rose for all maturities tracked on sustained bullish run.
The 10-year, 6.75% JAN 28, 2021 bond, the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt gained USD0.07, USD3.40 and USD3.20 respectively. Read Also: Nigeria’s 20-Year Eurobond Yield Rises to 8.96%
Meanwhile their corresponding yields fell to 3.63% (from 3.91%), 7.85% (from 8.23%) and 7.96% (from 8.27%) respectively.
“We expect the bonds stop rates to moderate amid demand pressure”, analysts at Cowry Asset Limited projected.
DMO to Issue ₦150 Billion Bonds amid Demand Pressure
