Chimara Bygold
The Federal government through the Debt Management Office (DMO) plans to offer FGN bond worth ₦150 billion through re-opening of 10-year (₦50 billion), 20-year (₦50 billion), and 30-year (₦50 billion) tenors.
The bond auction from the debt office is scheduled to be held on November 17, with a settlement on November 19 according to a DMO FGN Bonds offer
circular for November 2021 Primary Market Auction.
The DMO borrow money from the public on behalf of the federal government mainly to fund deficit budget.
Meanwhile, the Central Bank of Nigeria (CBN) held its scheduled Primary Market Auction on November 10, selling Nigeria Treasury-Bills worth ₦196.17 billion across the 91-day (₦4.12 billion), 182-day (₦2.99 billion), and 364-day (₦189.06 billion) tenors.
Treasury Bills are short term debt instruments used by CBN to borrow money from the public on behalf of the federal government.
The apex bank also uses TBs to control money supply in the economy.
The stop rates (the rate to sell an asset when it reaches a particular price point)
for the 91-day and 182-day tenor remained unchanged at 2.50 percent and 3.50 percent, respectively.
However, the stop rate for the 364-day tenor cleared lower at 6.50 percent (-49 bps).
Dealers from FSDH Securities said the auction was oversubscribed by 281 percent, with bid-to-cover ratios settling at 1.01x (91-day), 0.48x (182-day), and 4.10x (364-day).
According to dealers, NT-Bills secondary market closed on a positive note with average yield across the curve decreasing by 10 basis points (bps) to close at 5.12 percent from 5.22 percent on the previous day.
Average yields across medium-term and long-term maturities declined by 5 bps and 17 bps, respectively.
However, the average yield across the short-term maturities expanded by 5 bps. Yields on 13 bills compressed with the 25-Aug-22 maturity bill recording the highest yield decrease of 33 bps.
In the Open Market Operation (OMO) bills market, the average yield across the curve decreased by 4 bps to close at 5.96 percent as against the last close of 6.00 percent.
Average yield across the short-term maturities compressed by 21 bps while the average yields across medium-term and long-term maturities increased by 22 bps and 3 bps, respectively.
Yields on 7 bills declined with the 23-Nov-21 maturity bill recording the highest yield decrease of 59 bps, while yields on 8 bills advanced with the 22-Feb-22 maturity bill recording the highest yield increase of 27 bps.
