Nigeria sold 79.62 billion naira in sovereign bonds at an auction on Wednesday, fell short of the initial amount proposed as investors stayed on the sideline due to low interest offered on the debt paper.
The Debt Management Office (DMO) had planned to raise 100 billion naira worth in 5-year and 10-year paper at the auction but ended up with less amount.
Data released by the debt office on Thursday showed that a total of 27.18 billion naira of the 5-year paper was sold by the DMO at 13.70 percent yield, while 52.44 billion naira of the 10-year paper was sold at 13.98 percent.
Investors put in bids as high as 16 percent at the debt auction, but the debt office was unwilling to pay higher than the benchmark interest rate on the domestic debt.
Nigeria recently raised about $2.5 billion in Eurobond at an average of 7.6 percent in its bid to refinance domestic treasury bills at a cheaper rate.
Though investors put in about 117.58 billion naira in subscription, more than half of that was in demand for the 10-year paper.
The government has been working to lower its borrowing costs, particularly as inflation fell for the 12th time in a row in January.
Yields on local debt have started falling since the successful auction of the $2.5 billion Eurobond last week.
Investors are waiting for the debt office to announce which bills it intends to pay off and a reduction in auction volumes for the second quarter, which could spur buying.
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