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Nigeria to offer 30-year bond – Official

Nigeria’s Debt Management Office (DMO) has said that it will on April 24, issue a 30-year bond for the first time.The DMO said in a circular posted on its website on Wednesday that the N20 billion 30-year paper would mature in April 2049.

Other bonds on offer are a 10-year new issue of N40 billion to mature in April 2029 and a five-year re-opening of N40 billion to mature in April 2023, which was offered at 12.75 percent.

The circular, however, did not indicate the interest rates for the new issues.

Ms. Patience Oniha, the Director-General of the DMO, had at a news conference on April 4, revealed plans by the Nigerian Government to issue the 30-year paper.

She said that the bonds were considered, given the relatively low interest rates compared to 2017 levels of more than 18 per cent.

“The issuance of the bond will meet the needs of annuity funds and other long term investors, while also developing the domestic capital market and reducing the re-financing risk of the Federal Government.

“Another area of focus will be the management of risks associated with the debt stock to mitigate debt service costs,” she said.

She added that the 30-year issue would enable the government raise long-term capital for infrastructure, serve as benchmark for private sector raising of long-term investment capital.

It would also reduce short-term debt and deepen the Life Insurance sector in particular.

According to DMO, the units of sale is N1,000 per unit, subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

The bonds are backed by the full faith and credit of the Nigerian Government, with interest payable semi-annually to bondholders, while bullet repayment will be made on maturity date.

Nigeria 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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