FG to Borrow N450bn via Bonds in Q3

• FG to Borrow N450bn via Bonds in Q3

The Federal Government is planning to borrow between N360bn and N450bn via sovereign bonds maturing between five and 20 years in the third quarter, the Debt Management Office has said.

The DMO said on Wednesday that it would auction between N90bn and N120bn in the five-year note and between N135bn and N165bn in the 10-year and 20-year debt between July and September.

The Federal Government issues bonds each month to help fund its budget deficit, support the local debt market and maintain a benchmark for companies to follow.

The country expects a budget deficit of N2.36tn this year as it tries to spend its way out of a recession.

It expects to raise money to cover more than half the gap from the local market.

Meanwhile, the Federal Government has also said it is planning to borrow N1.24tn in the third quarter via the issuance of Treasury bills by the Central Bank of Nigeria.

A CBN debt calendar showed that it would sell N1.24tn worth of treasury bills from June 15 to August 31.

The apex bank aims to auction N226.64bn in 91-day bills, N311.32bn in 182-day and N698.64bn in 364-day debt.

The central bank sells TBs twice a month to help fund the government’s budget deficit and support commercial banks in managing liquidity.

The Federal Government has set out a budget plan worth N7.44tn for this year.

The country is grappling with its first recession in 25 years after a slide in global oil prices and due to the impact of attacks on oil facilities in the Niger Delta.

The Federal Government had recently issued a $300m diaspora bond.

The DMO said that Merrill Lynch and Standard Bank of South Africa were appointed as joint lead managers for the sale.

The country first unveiled in 2013 plans to sell diaspora bonds worth between $100m to $300m from Nigerians living abroad.

But the government at the time did not appoint a bookrunner.