Nigeria redeems $413 mln T.bill from Eurobond proceeds

Nigeria's Debt Management Office (DMO) said it has paid back 130 billion naira matured treasury bills this week in accordance with its decision to refinance maturing domestic debt with the proceeds of its recently issued Eurobond.

In February, Nigeria raised $2.5 billion Eurobond to help refinance portions of its treasury bill portfolio to lower costs.
The director general of the DMO, Patience Oniha said details of treasury bills issuance calendar for the second quarter of the year will be made available next week to reflect the new plans of the debt office on domestic debt.

Nigeria has a treasury bill portfolio of 2.7 trillion naira. It paid off 198 billion naira worth of bills in December, leading to rates dropping by around 300 basis points.

Yields on short-dated Treasury yields have been falling on expectations that the government will sell less debt at its second quarter auction after it sold the Eurobond. Traders expect rates to fall further after the repayment of the matured bills.

The debt office has been working to lower cost of borrowing by replacing domestic debt with foreign ones, especially now that inflationary figure has started trending downward. The consumer price index fell for the 12th time in a row in January.
This week, the DMO issued about 130 billion naira treasury bills at an auction, short of the 260 billion naira initially proposed with the yield on the lower range of the curve.

Investors demanded as high as 20 percent for the one-year bill which fetched 13.5 percent at the auction. The DMO sold the three-month bill at the lower-end of the curve at 11.85 percent.
Finance Minister Kemi Adeosun last month said the country would redeem 762.5 billion naira worth of treasury bills.