Nigeria sold 110.34 billion naira worth of bonds at its regular monthly debt auction on Wednesday, the sixth this year, at higher returns than the previous month's auction.
According to the results of the auction released on Wednesday by the Debt Management Office (DMO), the 5-year paper was sold at 14.30 percent compared with 14.11 percent the same tenor debt sold at the previous auction.
The debt office sold the 10-year bond at 14.50 percent against 14.24 percent previously while the 30-year paper sold for 14.68 percent compared with 14.49 percent at the previous auction.
The DMO sold28.99 billion naira worth of the 5-year paper, 36.36 billion naira of the 10-year debt and 31.49 billion of the 30-year bond at the auction.
It also sold additional 13.50 billion naira of the 10-year paper outside the auction on a non-competitive basis.
Traders said the increase in yields on the paper sold at the auction was influenced by the bearish sentiments within the bond space, which has resulted in higher returns during the month.
The instruments are re-openings of previous issues.
Total subscription at Wednesday’s auction stood at 160.13 billion naira, against a total of 100 billion naira initially put on offer by the debt office.
The central bank and other major government financial institutions are not allowed to participate in the auction but are given a special allotment so that they will not crowd out other investors.
Nigeria, Africa’s second-biggest economy after South Africa, issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
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