Nigeria bond sale fails to meet target, investors seek higher yields

Nigeria's bond auction fell short of its target, attracting low interest among investors who were demanding higher yields in the wake of a weaker naira currency and falling oil prices.
Failure to reach its target is yet another worrying sign for the government, which is already facing a funding crisis due to the decline in oil revenues and escalating tension over its decision to push a Feb. 14 vote to March 28.
Nigeria raised 76.5 billion naira ($375.2 mln) at the bond auction on Wednesday, short of its target amount of 90 billion naira, the Debt Management Office (DMO) said on Thursday.
"Yields have gone up at the secondary market and many people expect that yields should be higher at the auction to compensate," one dealer said.
Total subscription stood at 123.6 billion naira, the debt office said, down from 129.5 billion last month.
A total of 34 billion naira was sold in 5-year bond at 15.54 percent. The 5-year paper was a fresh issue.
The 10-year bond was issued at 15.75 percent to fetch 25 billion naira, compared with 15.42 percent at the last auction.
The debt office said it sold 15.5 billion naira worth of 20-year notes at 15.85 percent, compared with 15.47 percent at the previous auction in January.
Investors asked for yields as high as 17.5 percent for the 5-year paper and as much as 19.9 percent for the 20-year bond, the debt office said.