Monday, 9 June 2014
Federal Government to raise N70bn bond.
The Federal Government is planning to raise N70bn in three and 10-year bonds in an auction on June 11, the Debt Management Office has said.
The debt office said it would issue N35bn each in the papers, maturing in August 2016 and March 2024 respectively.
The bonds are re-openings of earlier issues, according to a public notice by the debt office.
Meanwhile, the Federal Government has sold N137.85bn of Treasury bills ranging from three-month to one-year maturities with the six- month and one-year paper fetching higher yields than at the previous auction, while returns on the three-month bill was unchanged.
The Central Bank of Nigeria said on Friday it issued N27.85bn in the 91-day Treasury bill at 10 per cent, the same rate attracted by the paper at the previous auction last month.
The bank sold N30bn worth of the six month bill at 10.45 per cent, 44 basis points higher than 10.01 per cent the same tenor got at the last auction, while it sold N80bn in the one year paper at 10.49 per cent against 10.12 per cent previously.
Total demand stood at N304.36bn, lower than the N520.7bn in subscriptions at the May 21 auction.
Reuters reported that yields on Treasury bills had fallen 20 basis points across the board at the secondary market on Thursday after the new CBN governor, Godwin Emefiele, signalled the bank would seek to gradually reduce interest rates.
Meanwhile, the naira appears headed for its lowest level since April after the new Central Bank of Nigeria Governor, Mr. Godwin Emefiele, said policymakers might begin cutting record-high interest rates for the first time in almost three years.
According to a Bloomberg report, the currency depreciated 0.8 per cent to N164.25 per dollar on Friday in Lagos, the weakest on a closing basis since April 1.
The naira has fallen for the past two days, extending this year’s decline to 2.4 per cent.
While the CBN intends to keep the currency stable, policymakers will lower the African country’s main rate gradually, Emefiele said in his first public speech since taking office this month. The regulator has kept the key lending rate unchanged at a record high of 12 per cent since October 2011.
“The naira could come under pressure as demand for the currency declines while its supply rises,” Johannesburg-based analysts at ETM Analytics, Chris Becker and Catherine Bennett, said in an e-mailed note.