The Debt Management Office raised 93 billion naira ($604.3 million) in three, five- and 10-year sovereign bonds on Wednesday, at its eighth debt auction of the year, the Debt Management Office said yesterday.
The debt office said it sold 30 billion naira of the three-year, 15 billion naira of fiv-year and 25 billion naira of 10-year papers, due to mature in 2014, 2015 and 2018 respectively. All the papers are re-openings of previous issues.
DMO said an additional 23 billion naira in the three-year paper were sold to some mandate customers outside the auction.
The three-year paper was given a marginal rate of 10.75 percent, above 10.24 percent offered last month, while the five-year instruments were allotted at 11.19 percent against 10.70 percent. However, the 10-year papers were allotted at a marginal rate of 11.39 per cent, lower than the 11.49 per cent at the previous auction.
The central bank on July 1 lifted a restriction requiring foreign investors to hold government debt for at least a year, aiming to attract new offshore inflows.
“The debt office usually sells bonds to some mandate customers with large volumes of funds outside the auction proper,” an official told Reuters. “If such customers are allowed to participate in the auction, they might crowd out other investors, hence the special allotment outside the usual auction.”
Total subscription stood at 170.52 billion naira compared to 157.98 billion naira last month, the DMO said. Dealers said appetite for the papers was high due to large cash inflows into the system from July budgetary allocations to government agencies.
“The original coupon rates of 10.50 per cent, 4.0 per cent and 10.70 per cent for the three-year, five-year and 10-year offers respectively will be maintained,” the debt office said in a statement.