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The Nigerian Debt Management Office (DMO) has announced plans to auction ₦190 billion in reopened bonds next week. This move is part of the government’s ongoing efforts to finance the 2024 budget deficit.
So far in 2024, the DMO has raised ₦4.3 trillion through government bond sales in the capital market, representing 70% of its borrowing target for the year. Additionally, the Federal Ministry of Finance has disclosed plans to issue a Series 1 dollar-denominated FX bond in August 2024, aiming to raise $500 million with an indicative yield of 9.5%–10%.
While specific details of the dollar-denominated bond issuance remain unclear, the DMO’s upcoming primary market auction is set to offer investors ₦190 billion worth of government bonds. This is a reduction from previous monthly issuance sizes of ₦300 billion, indicating a possible slowdown in the government’s borrowing from the primary markets.
According to the auction schedule, the DMO will offer a 5-year reopening bond worth ₦70 billion and a 7-year reopening bond for the same amount. Additionally, a 9-year bond reopening worth ₦50 billion will be available for subscription.
The secondary market has recently seen yields surge to 20%, driven by selling activities amid economic uncertainties and inflationary pressures. In July, the DMO allotted ₦225.72 billion out of the ₦300 billion it offered, with total subscriptions reaching ₦279.67 billion.
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