DMO offers N140bn bond, after CBN mops up N133.24bn in Treasure bills sale

Barely 48 hours of the Central Bank of Nigeria (CBN) mopping up excess currency in circulation in Nigeria, with sale of N133.24 billion in Treasury Bills, the Debt Management Office (DMO) on Friday announced that it is auctioning N140 billion bonds (about $460 million).

The bond auction, which is billed to hold on Wednesday, June 21, will be made up of N40 billion to be due in 2021; N50 billion bonds, each for 2027 and in 2037, using a Dutch auction system.

According to the DMO, settlement is expected the day after the sale, as the new bonds will be part of the May 2017 issues.

It would be recalled that this is nearly two days after CBN had announced plans to sell more than N133 billion worth of Treasury bills at an auction also next week.

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Experts said Nigerian frequency rise in use of financial instruments to raise funds in Nigeria is now the highest in Africa.

Mr. Godson Onajimo, a financialist, said the Nigerian economy is now being run from monthly issuance of sovereign bonds which the government relies to raise funds for its budget implementation.

“In other climes, Treasury Bills and bonds are sought after because they serve as the last resort to attracting idle funds to their economies.

“But the fact that Nigeria is not getting the expected responce from international financial institutions for loan with which to run its budget deficits, its reliance on the instruments as the only surving hope is playing out.

“If well managed, the policy will support the local debt market and help to maintain a benchmark for private sector to follow suit in attracting investment,” he said.

 

 

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