The pressures on Nigerian money market resonated in the bonds market yesterday as the Debt Management Office, DMO, announced that it could sell only N45 billion out of the initial N70 billion worth of Naira-denominated bonds maturing in 2020 and 2034.
Rates have also gone up significantly to 15.97 percent from the 12.149 offer rate for 2034 maturing bond, while 2020 bond rate went up to 15.95 percent from offer rate of 15.54.
DMO is also paying higher yields than at its previous auction in August. At 15.95 percent yields, yesterday’s auction results show 57 basis points more than 15.38 percent in August auction, while at 15.97 percent the 2034 bond attracted higher yield against 15.19 percent in last month.
A total of N20 billion worth of 2020 bond was sold, while a total of 25 billion Naira worth of the 2034 bond was sold.
Dealers said the debt office was constrained by the higher yields that investors demanded and reduced the amount of debt sold.
Investors had asked for yields ranging from 13.5 to 20 percent for the 2020 bond and 14.5 to 20 percent for the 2034 debt; but the debt office decided to cut off the sale at 15.95 and 15.97 percent, respectively.
Investors submitted bids worth 121.20 billion naira, lower than the 153 billion naira at the last auction.
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