Nigeria Raises ₦70b in Bonds at Lower Yields

Nigeria issued 70 billion naira ($350 million) worth of naira-denominated bonds maturing in 2020 and 2024 at an auction on Wednesday, at lower yields than the returns at its previous auction, the Debt Management Office said on Thursday.

The yields are a reflection of the performance of the local debt at the secondary market, traders said.

The debt office issued 30 billion naira in the 2020 debt at 10.24 percent against 13.11 percent at the previous auction in October. The same tenor bond closed at 10.16 percent at the secondary market on Wednesday.

A total of 20 billion of the benchmark bond maturing in 2024 was issued at 10.01 percent compared with 13.87 percent same tenor debt attracted at the October auction. The 2024 paper closed at 10.26 percent at the secondary market on Wednesday.

The debt office also allotted additional 20 billion naira worth in the 2020 paper on non-competitive basis to mandate clients.

Yields on Nigerian debt have dropped sharply since last month due to increased naira liquidity in the banking system, spurring demand for the local bond by pension, insurance firms and commercial lenders.

Interbank lending rate closed at 1 percent for overnight lending on Wednesday due to excess cash balance in commercial lenders' accounts.