Nigeria to raise N100 billion from local debt markets

09 Mar 2016
Chibuike Oguh

Summary

Nigeria’s current debt-to-GDP ratio is 11.5 percent.

Nigeria's Minister of Finance, Kemi Adeosun

The Debt Management Office (DMO) has announced an auction of N100 billion worth of bonds denominated in local currency.

According to a circular published by the DMO on Wednesday, investors are invited to bid for a N20 billion bond, with a coupon rate of 15.54 percent and a tenor of 5 years (maturing in 2020); a 40 billion bond, with a coupon rate of 12.5 percent and a tenor of 10 years (maturing in 2026); and a N40 billion bond, with an undisclosed coupon rate and a tenor of 20 years (maturing in 2036).

The 2020 and 2026 debts are a re-opening of a previously issued instrument, while the 2036 debt is a new issue.  

The auction and settlement dates for the bond issuance are March 16 and March 18, respectively. The first debt auction of the year took take place on January 20. The DMO issued between N40 billion and N60 billion of bonds maturing in 2020 and 2026.

In January, the DMO had said it would issue between N260 billion ($1.31 billion) and N390 billion ($1.97 billion) worth of bonds denominated in local currency with a 5-year, 10-year and 20-year maturity periods.

The federal government plans to raise N984 billion ($4.97 billion) from the domestic market and N900 billion ($4.55 billion) from foreign markets to fund the N2.22 trillion ($11.21 billion) deficit stipulated in the N6.08 trillion ($30.71 billion) 2016 budget proposed by President Muhammadu Buhari.

The 2016 budget deficit is expected to raise Nigeria’s overall debt profile to 14 percent of GDP. Nigeria’s current debt-to-GDP ratio is 11.5 percent.

As at December 31, 2015, Nigeria’s domestic debt (excluding states) stood at N8.84 trillion ($44.86 billion) while domestic debt of the states stood at N1.66 trillion ($9.85 billion). Nigeria’s total public debt stood at N12.6 trillion ($65.43 billion).


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