Nigerian govt to open auction for two N75 billion bonds

The Nigerian government will open an auction on Wednesday to welcome, from investors, offers for a combined sum of N150 billion in bonds through the local debt market to meet its funding needs, the Debt Market Office (DMO) said.
To be sourced in pairs, the offering seeks to raise N75 billion at a coupon rate of 12.50 per cent set to mature by January 2026 through its first note while the second carries the same value but at a 13 per cent rate, which expires January 2042.
According to the offer terms, it will be allocated at “N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.”
Nigeria’s avalanche of public debt climbed to N38 trillion in September 2021, 18 per cent higher than a year earlier, the debt office said in December, as the government’s obsession for borrowing to fund critical infrastructures remains too hard to cure.
Last year, the country spent 85.5 per cent of its revenue servicing debt and the figure is bound to hit 92.6 per cent this year, the International Monetary Fund said this month, hinting that Nigeria could be plunged into a debt sustainability crisis soon.
A $4 billion Eurobond raised in September went into budget support and provided a bulwark for its foreign exchange reserves, which took a hit from an oil crash and the Covid-19 outbreak. That was Nigeria’s seventh round of exploring the market.
Patience Oniha, the DMO, has said government will not tap that market this year but will be casting its glance elsewhere.
The government plans to borrow N6.3 trillion to plug its funding gap for 2022.

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