The Nigerian Debt Management Office (DMO) has revealed plan to raise N300 billion from two difference local bonds with 5, and 9 years maturity at the monthly auction schedule for next week Monday.
Fixed income market trading activities have been heated up lately with surging demand for naira assets. Demand for bonds and other fixed-interest securities gained steam as the inflation rate fell below the benchmark interest rate last month.
The development created another risk as analysts warned that lower yields on government borrowing instruments could trigger capital outflow from the market, and, by extension, the overall economy.
Business a.m. gathered that the debt manager has replaced the February 2031 paper with the May 2033 paper. At the auction schedule for next week, the DMO plans to raise N200 billion from April 2029 bonds and N100 billion from May 2033 paper.
Some analysts have already projected that the auction will be oversubscribed due to heightened appetite for the naira assets as inflation continues to slow.
However, a slew of fixed income market analysts hold divergence views on spot rate direction, but declining yield on naira assets has become a common theme in the local debt capital market.
Banks, pension fund managers are expected to remain active at the auction as interest and inflation rates gap widen in February. FGN Bonds are backed by the full faith and credit of the federal government and are charged upon the general assets of Nigeria.
Stitch in time! Take Nigeria’s economy back to drawing board