FG Auctions N123bn Bonds


By Obinna Chima, 10.22.2010

The Federal Government has sold a total of N122.93bn ($820 million) bonds at its 10th debt auction of the year, the Debt Management Office (DMO) said yesterday.Reuters which disclosed this yesterday listed a 20-year, 7-year and 3-year sovereign bonds as the various fixed instruments that were auctioned by the DMO. It explained that N58.76bn were sold in the 20-year, N37.50bn in the 7-year and N26.67bn in the 3-year instruments at Wednesday's auction, adding that all the instruments are re-openings of previous issues.

“The marginal rate on the 3-year bonds rose to 10.50 per cent from 8.43 percent last month, that of the 7-year paper was 11 per cent, while the 20-year bond rate climbed to 14 percent from 12.53 percent. But the original coupon rates of 5.50 percent, 9.25 percent and 10 percent for the 3-year, 7-year and 20-year respectively would be maintained," the debt office said. The debt office had initially offered N142.81bn,  but had to cut it to N122.93bn despite demand of 160.05bn.Meanwhile, sustained liquidity in the interbank market led to further drop in rates yesterday.

The Open Buy Back (OBB) for banks fell by 4 per cent to 4.29 per cent yesterday as  against the previous day’s figure of 8.29 per cent.  The OBB for discount houses also declined by 4.41 per cent from 8.58 per cent on Wednesday, to 4.17 per cent yesterday. The 30-days, 60-days and 90 days tenor of the London Inter Bank offer Rates (LIBOR) did not budge  as they all closed at 0.26 per cent, 0.27 per cent and 0.29 per cent in that order, whereas the 180 days tenor slipped to 0.45 per cent.

Similarly, the various placement periods of the Nigerian Inter Bank Offer Rates (NIBOR) reduced further.  For Instance, while the overnight tenor dropped significantly by 4.75 per cent to 5.29 per cent, the 7 days cost of fund reduced by 3.04 per cent to 7.21 per cent.  The 30-days tenor also lowered by 1.83 per cent to 9.25 per cent.

Source: ThisDay

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