Nigerian Government to sell N150bn worth of bonds

The Federal Government is scheduled to raise some N150 billion through the issuance of new medium and long-term bonds at the primary segment of the debt market on Thursday.

The primary market auction (PMA) involves reopening of a medium-term bond and two long-term bonds with offer size of N50 billion each. The bonds being reopened include the 16.2884 percent FGN March 2027 bond, 12.50 percent FGN March 2035 bond and 9.80 percent FGN July 2045 bond.

The 16.2884 percent FGN March 2027 bond has five years and 11 months to maturity while the 12.50 percent FGN March 2035 bond and 9.80 percent FGN July 2045 bond have 13 years and 11 months, and 24 years and three months.
The previous stop rates for the three bonds were 10.5 percent, 11.5 percent and 12.00 percent.

Last week, secondary market trading on the FGN bonds had continued on a bearish note as investors exited positions following the release of March, last year inflation rate at 18.17 percent.

Data showed that the slowdown in demand pushed average yield across the curve by 108 basis points (bps) to 11.45 percent by the weekend as against 10.37 percent penultimate weekend.

The short-dated maturities such as 27-Apr-23, 14-Mar-24, and 23-Mar-25 recorded the most sell-offs, advancing 333 bps, 272 bps and 202 bps respectively during the week.
The fixed-income market has taken a bearish note in recent period as investors slowed down from the previous rush to rebuild fixed-income portfolios.
According to Analysts, the Central Bank of Nigeria’s (CBN) open market operation (OMO) maturities worth N10 billion, which will hit the system this week, will continue to put the funding levels under pressure.

The Nigerian Treasury Bills (NTBs) had last week traded negative at the secondary market following pressured liquidity levels and primary auctions.
Average yields across the curve dipped slightly by five basis points last week to settle at 4.35 percent from 4.40 percent recorded in the previous week.

The 26-Aug-21 and 9-Sep-21 bills witnessed the most buying interest from investors, declining 37 basis points and 33 basis points.

Nation/Hauwa Abu