Nigeria sells longer term treasuries at higher yield to draw funds

Nigeria raised N252.88 billion ($827m) at a treasury bill auction on Wednesday as investors piled demand into the higher yielding one-year debt, traders said Thursday, according to Reuters.

The central bank sold N177.22 billion of one-year debt at a rate of 13.7 percent. It auctioned N6.09 billion of three-month debt at 12 percent and N69.57 billion of six-month maturity debt at 13.65 percent. Total subscription stood at N355.2 billion.

Traders said some offshore funds participated in the auction, helping boost dollar liquidity on the currency window for investors to keep naira rates stable. The bank has maintained tightened liquidity to attract foreign buyers.

Nigeria’s debt office plans to raise $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost.

It repaid 198 billion naira worth of treasury bills in December, instead of rolling them over, to lower costs.

Investors bid as high as 18.5 percent for the one-year paper.

However, the government has been offering debt at lower yields to track declining inflation, which fell for the eleventh straight month in December, to 15.37 percent.

Courtesy Reuters