Nigeria Says More Investors Embracing 30-year Bond As DMO Raises 111.3 Bln NairaAt Auction

Nigeria raised a total of 111.31 billion naira worth in domestic bond on Wednesday at an auction where investors' appetite for the longer tenor 30-year bond was apparent.

According to the Debt Management Office (DMO), demand at the auction was stronger on the 10-year tenor debt with investors willing to buy 124.22 billion naira worth of the paper compared with 35 billion naira worth initially offered by the debt office. Investors also demanded a total of 100.91 billion naira worth of the 30-year paper and 27.38 billion naira of the 5-year debt.
The debt office initially offered 35 billion naira apiece in the 5-year and 10-year paper.
The three tenor bonds were sold at 14.11 percent for the 5-year paper, 14.24 percent for the 10-year debt and 14.49 percent for the 30-year bond.
However, the debt office sold 48.93 billion naira worth of the 30-year debt, 35 billion naira of the 10-year paper and 27.38 billion naira of the 5-year paper.
Last month, the debt office first offered the 30-year paper to investors in its bid to attract long term funding for infrastructure in the country.
DMO said the strong demand for the 30-year paper was an indication that the debt office "understands the needs and preferences of investors in terms of tenor, which informed its introduction of the 30-year Bond."
"n addition to the strong demand, interest rates demanded by investors also significantly declined for all the instruments compared to the April 2019 Auction," the debt office said in a statement.
Nigeria, Africa's biggest economy issue domestic debt on a monthly basis to fund budget deficit, help manage liquidity in the financial market and set benchmark for corporate debt issuance in the country.