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Tag: DMO

  • Investors showing high level of demand for FG bonds – DMO

    The Debt Management Office (DMO), says investors have in recent months been showing high level of demand at Federal Government bond auctions, a development which continued at the auction for June.

    A statement issued by the organisation on Wednesday in Abuja, noted this was evident at an auction carried out by it where three instruments totalling N100 billion were offered to the investing public with five, 10 and 30-year tenors.

    According to it, subscriptions for the three instruments from competitive bids were slightly above N160 billion, indicating an oversubscription of 60 per cent.

    “Investors’ appetite for longer tenored instruments remained strong, with the 30-year bond oversubscribed by 100 per cent.

    “The 10-year bond was also oversubscribed by over 50 per cent, while the five-year tenor was 31 per cent oversubscribed,” it said.

    In the auction results obtained from the DMO website in Abuja, N28.99 billion was allotted to 19 successful bidders at 14.3 per cent for the five-year and N36.36 billion to 22 bidders at 14.5 per cent for the 10-year papers.

    Meanwhile, N31.49 billion was allotted to 30 bidders at 14.68 per cent for the 30-year bonds, bringing the total allotments to N96.84 billion.

    It said that an additional allotment of N13.50 billion was made on non-competetive basis for the 10-year bond, also at the rate of 14.5 per cent.

    The News Agency of Nigeria (NAN ), reports that Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

  • FG allots N438m to 469 savings bond subscribers in June – DMO

    FG allots N438m to 469 savings bond subscribers in June – DMO

    The Federal Government says it allotted N438 million to 469 subscribers during its sale of savings bond in June.

    The results of the sales obtained from the website of the Debt Management Office (DMO) on Friday in Abuja, showed that N108.8 million was allotted for June 2021 at 11.41 per cent.

    It also indicated that N329.2 million was allotted at 12.41 per cent for the June 2022 papers.

    The News Agency of Nigeria (NAN) reports that savings bond issuance was expected to help finance the nation’s budget deficit.

    The bond issuance was part of the Federal Government’s programme targeted at lower income earners to encourage savings and also earn more income (interest) compared to their savings accounts with banks.

    The bonds were debt securities (liabilities) of the Federal Government, backed by its ‘full faith and credit.’

    Interests were to be paid at regular periods and principal repaid at maturity.

    The bonds had a tenure of between two to three years and a minimum size of investment of N5, 000 and maximum of N50 million.

    The bond was aimed at deepening national savings culture, diversifying funding sources for the government and providing opportunity to all citizens, irrespective of income level to contribute to national development.

    It would also enable all citizens to participate and benefit from the favourable returns available in the capital market.

  • FG offers N100bn worth of bonds on June 26

    FG offers N100bn worth of bonds on June 26

    The Federal Government has offered for subscription by auction N100 billion worth of bonds in its June 26 auction, the Debt Management Office (DMO) said.

    The offer circular obtained from its website on Tuesday in Abuja, stated that it would sell N30 billion of a five year re-opening issue maturing in April 2023 at 12.75 per cent.

    DMO would also sell N40 billion 10 year re-opening bond to mature in April 2029 at 14.55 per cent and another N30 billion 30 year re-opening at 14.80 per cent to mature in April 2049.

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

  • N15b Green Bond oversubscribed by 220% – DMO

    Nigeria’s second Sovereign Green Bond offered for N15 billion has been oversubscribed by 220 per cent, the Debt Management Office (DMO) said on Thursday.

    A statement from DMO said “the proceeds of the Green Bond will be used to finance projects in the 2018 Appropriation Act, which will contribute to Nigeria’s commitments to the Paris Agreement on Climate Change.”

    The projects DMO said will “include Off-Grid Solar and Wind Farm, Irrigation, Afforestation and Reforestation, as well as, Ecological Restoration.”

    The DMO noted that “the results of the second Sovereign Green Bond issuance revealed increased knowledge and awareness of Green Bonds by subscribers, and perhaps also demonstrated a greater level of commitment from the general public towards protecting the environment.”

    Total value of subscriptions received was N32.93 billion, representing 220 per cent of the N15 billion offered. It was also revealed that, “the number of subscribers doubled when compared to the figure for the first Sovereign Green Bond issued in December 2017.”

    Retail investors were not left out, as the number of individuals who subscribed for the second Sovereign Green Bond more than doubled.

    The amount of subscriptions grew by almost 201 per cent with the share of total subscriptions rising to 1.43 per cent compared to 0.67 per cent for the 2017 Sovereign Green Bond.

    “The stronger participation of retail investors shows that financial inclusion and deepening of the domestic financial market, which are some of the key objectives of the DMO in its issuance activities, are being achieved” the DMO said.

    Whilst the offer was oversubscribed, the DMO allotted only the N15 billion that was offered for a tenor of seven years, at a coupon of 14.50 per cent per annum.

  • DMO sells N100bn FGN bonds today

    Federal Government of Nigeria (FGN) bonds worth N100 billion would be sold to investors today by the Debt Management Office (DMO).

    The paper would be auctioned in three maturities; 5-year bond maturing in 2023, 10-year bond maturing in 2029 and the debut 30-year bond maturing in 2049.

    The debt office said in a notice it would offer N40 billion worth of the 5-year note, another N40 billion of the 10-year paper and N20 billion worth of the 30-year bond.

    Already, 13 financial institutions have been authorised by the Nigerian government to sell the bonds to investors.

    These financial institutions are Access Bank Plc, First Bank of Nigeria Ltd, Standard Chartered Bank Nigeria Ltd, Citibank Nigeria Ltd, First City Monument Bank (FCMB) Plc and United Bank for Africa (UBA) Plc.

    Others are Coronation Merchant Bank Ltd, FSDH Merchant Bank Ltd, Zenith Bank Plc, Ecobank Nigeria Ltd, Guaranty Trust Bank (GTBank) Plc, FBNQuest Merchant Bank Ltd and Stanbic IBTC Bank Plc.

    Intending investors will be required to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

    The debt office stated that for re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument, with the interest paid semi-annually.

    The rate the bonds would be offered by the debt office is not yet certain, but there are indications that it would be in double digits.

  • Nigeria’s total debt stock grows to 24.3trn – DMO

    The Debt Management Office (DMO) has announced Nigeria’s total debt stock comprising external and domestic debts stand at N24.387 trillion.

    Director General of the DMO Ms. Patience Oniha made this disclosure at the public breakdown of the nation’s public debt data in Abuja on Thursday.

    According to Oniha: “the Total Public Debt stood at N24.387 trillion or USD79.437 billion as at December 31, 2018 representing a year-on-year growth of 12.25%.

    From the breakdown, it was revealed that the FGN External Debt in 2018 was N6. 460 trillion up from N4.527 trillion representing a 42.69% increase.

    “The FGN Domestic Debt in 2018 on the other hand was N12,774 trillion up from N12,589 trillion the previous year representing a 1.46% increase.

    “The sum of both external and domestic FGN debts was put at N19,234 trillion while the total sum of the external and domestic debt stock of the 36 states and the Federal Capital Territory (FCT) was put at N5,152 trillion broken down as N3,853 trillion domestic debts and N1,298 trillion external debts.”

    The DMO boss further stated: “Progress was made towards achieving the target Debt Stock mix of 60% (Domestic) and 40% (External). The share of Domestic Debt dropped to 68.18% from 73.36% as at December 31, 2017 thereby achieving a Mix of 68.18% and 31.82% in the Debt Stock.

    “The DMO strategy of using relatively cheaper and longer tenored external funds is achieving the expected objectives.

    “Some of the objectives were: to create more space for other borrowers in the domestic market, extend the average tenor of the debt stock in order to reduce refinancing risk and increase External Reserves.”

    The implementation of the strategy led to an injection of N855 billion through the redemption of Nigerian Treasury Bills in 2018 and a general drop in the FGN’s borrowing rate in the domestic market from over 18% p.a. in 2017 to 14 – 15% p.a. in 2018.

    With regards to the N3.4 trillion Promissory Notes Issuance to Settle Inherited Local Debts, Oniha disclosed that the purpose is to use it to settle Inherited Local Debts and Contractual Obligations of the Federal Government.

    The programme, which is estimated at N3.4trillion, Oniha said covers: Contractors; Exporters; Judgement Debt; State Governments and Oil Marketing companies.

    The features of the promissory notes to be issued are that it will serve as Sovereign and negotiable Instruments and also have Liquid Asset Status.

    The DMO boss stated the FGN’s Domestic Debt Stock includes N331.12 billion Promissory Notes issued to Oil Marketing Companies and State Governments in December 2018.”

    The benefits of issuing the promissory noted the DMO boss stated include: “it will provide stimulus to the economy and unlock investment across a number of sectors currently having liquidity issues; Positive impact on the non-performing loan ratios of banks which will in turn, increase the banks capacity to lend; Enable the Federal Government to formally recognise and account for its true liabilities in line with the International Public Sector Accounting Standards (IPSAS).”

    Some of DMO’s major plans in 2019 are to undertake more of project-tied borrowing and access more external borrowing from Concessional Sources. Furthermore, the DMO announced plans to issue 30-year Federal Government of Nigeria Bonds (FGN Bonds) for the first time.

    “The issuance of the Bond Oniha said: “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 FGN.”

    Another area of focus in 2019 will be the management of Risks associated with the Debt Stock to mitigate Debt Service Costs.”

    In 2019, Budget Deficit was put at N1. 859 trillion but new borrowings, if passed by the National Assembly have been put at N1.649 trillion.

    By this development, the percentage of Deficit to be Funded by Borrowing in 2019 will 88.7 0%.

    According to Oniha: “the New Borrowing in 2019 (subject to NASS Approval) will be a 50-50 split for Domestic and External both at N824 billion. The domestic borrowing component also known as FGN Bonds, will sourced from Sukuk, Green Bond and Savings Bond while the external (N824 billion) will be largely Concessional, Cheaper and will help reduce Debt Service Cost. Longer-term funds for infrastructure, used to create space for private sector borrowing and Increase External Reserves

    Patience Oniha also explained: “Proceeds of the USD500 million Eurobond raised in November 2017 and USD2.5 Billion were used to redeem the N198.032 billion of Nigerian Treasury Bills (NTBs) that matured in December 2017.

    “Also, USD2.5 billion Eurobond Proceeds (February 2018) were used to redeem N729.95 Billion Nigerian Treasury Bill (NTB) in 2018.”

     

  • Nigeria’s public debt stock hits N22.38trn

    Nigeria’s public debt stock hits N22.38trn

    The Debt Management Office (DMO) has said Nigeria’s total public debt stock now stands at N22.38 trillion or $73.21 billion.

    The nation’s debt stock comprises external and domestic debts of the federal government, the 36 states of the federation and the Federal Capital Territory (FCT).

    In a statement issued by the debt office, it was disclosed that these figures were about the same recorded in June 2018.

    It was stated that the external debt declined by 2.02 percent to $21.592 billion largely due to the redemption by Nigeria of a $500 million Eurobond which matured on July 12, 2018.

    The Eurobond, which was issued for a tenor of 5 years in 2013, was the first Eurobond maturity for Nigeria and the ability of government to repay it seamlessly boosted the nation’s position as a good credit in the International Capital Market.

    The domestic debt of the FGN, states and the FCT grew by 1.19 percent from N15.629 trillion in June 2018 to N15.814 trillion in September 2018.

    According to the DMO, this increase of N185 billion was attributed to the FGN (N135 billion) and states and FCT (N50 billion).

    The combination of an increase in the level of domestic debt and decrease in the external debt stock, resulted in a slight shift in the portfolio composition.

    As at September 30, 2018, the share of domestic debt was 70.51 percent compared with 69.83 percent in June 2018. This trend is expected to be reversed in Q4 2018 as the new external borrowing of N849 billion (about $2.78 billion) provided in the 2018 Appropriation Act is expected to be raised within the quarter.

  • N800bn Subsidy Debt: DMO, finance ministry move to avert fuel crisis

    The federal government has begun moves to dialogue with oil marketers over debts owed them, to avert a fuel crisis in the forthcoming festive season.

    The moves came amid reports that some of the marketers have dissociated themselves from last Sunday’s ultimatum for the payment of the outstanding fuel subsidy debt.

    According to a report by Premium Times, as part of moves to stop the looming fuel crisis, Executive Secretary, Depot and Petroleum Products Marketers Association (DAPPMA), Olufemi Adewole confirmed on Wednesday the Debt Management Office (DMO) has invited aggrieved marketers and depot owners to a crucial meeting on the matter.

    Adewole said the meeting scheduled for Thursday in the Ministry of Finance headquarters in Abuja will discuss the concerns raised by the marketers in their ultimatum letter issued last Sunday.

    The letter purportedly written by DAPPMA, along with the Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Products Importers (IPPIs), gave government seven days within which to pay over N800bn outstanding fuel subsidy debts in cash or risk the withdrawal of services.

    Some of the oil marketers groups said to have joined in issuing the ultimatum, however, disowned the letter on Wednesday.

    With the deadline of the ultimatum barely four days away, Supervising Minister of Finance, Zainab Ahmed on Tuesday said government was proposing to offer over N340 billion in promissory notes to the marketers “in a few days’ time.”

    But, the marketers said promissory notes would not help solve their immediate challenge of settling their workers’ salaries and sundry obligations.

    Close followers of the debt dispute said on Wednesday the meeting on Thursday would provide the relevant government representatives a forum to dialogue with the marketers on possible ways to resolve the problem.

    Regardless, Adewole said DAPPMA was not perturbed about reports IPMAN and MOMAN were disowning the Sunday ultimatum to the federal government.

    “It is their decision,” the DAPPMA boss said: “It means they are not being owed by government. We (DAPPMA) are the people being owed. If they chose to disown the ultimatum, there is no problem.

    “We did not mention in our letter that we are working with any other group to realise our demands. If they say they were not part of the demand, and at the end of the day, government pays us, and do not pay them, it is okay by us.”

    The National Secretary of IPMAN, Danladi Pasali, in a statement on Wednesday dismissed the ultimatum as “an attempt by some groups of oil importers to disrupt the relative peace in the downstream oil sector of the country over the subsidy debts.”

    “This is nothing, but intimidation and an attempt to frustrate the effort by government to ensure Nigerians have a hitch-free yuletide celebration,” Pasali said.

    He described as unfortunate a situation where some groups were “more concerned of their personal interest above national interest.”

    Although he said it was good for the marketers to demand their rights, he said the decision to ground the petroleum sector at this festive period was an act of sabotage.

    He said already the DMO was addressing the marketers concerns by issuing promissory notes approved by the Executive Council of the Federation (FEC) under the Promissory Note and Bond Issuance programme.

    The promissory notes programme was established in July 2017 to help government settle inherited local debts and contractual obligations due to various categories of creditors, including oil marketers.

    He appealed to the marketers to change their tactics by seeking other alternatives to push their demands, and avoid blackmail and sabotage.

    He said IPMAN members were aware of government’s efforts to settle the outstanding subsidy debts as a way of ensuring hitch-free yuletide season.

    On Tuesday, MOMAN, whose members consist of the six major oil marketing firms in the country, including Mobil, Conoil, OVH Energy, Forte Oil, MRS Oil and Total Nigeria Plc, also distanced its members from the ultimatum to government on the issue.

    The Executive Secretary of the group, Clement Isong, who also spoke with PREMIUM TIMES on the issue, denied his members were party to the ultimatum.

    “MOMAN has never been part of the marketers’ groups that issued the ultimatum to the federal government. Issuing of ultimatum for a strike is not part of MOMAN’s mode of operation.

    “MOMAN, which is quoted in the Nigerian Stock Exchange, and has some foreign membership, cannot be part of any action that can jeopardize the Nigerian economy,” He added.

     

  • Nigeria borrowed over N2tn local, foreign loans to fund 2017 budget – DMO

    The Debt Management Office (DMO) on Monday said the Federal Government borrowed a total of N2.32tn in 2017 to fund deficit in the budget.

    DMO said this in its 2017 Annual Report made available to newsmen in Abuja on Monday.

    According to DMO, the total amount was borrowed from both the domestic and the foreign debt markets.

    The report said, “The total borrowing of N2, 321.77bn, comprised N1, 067.50bn and N1, 254.27bn from foreign and domestic sources, respectively, was raised to fund the 2017 budget deficit.

    “The FGN Bond issuances dominated primary bond market activities as the government continued to issue bonds to finance its budget deficit and refinance maturing obligations among others.

    “The Federal Government introduced three new products into the domestic debt market, namely: FGN Savings Bond, Sovereign Sukuk Bond and Green Bond.

    “In the corporate bond market, there was a decline in activity relative to 2016, as corporates raised only N21.5bn in three issues in 2017, representing 75 per cent decline from N86.1bn in 2016.”

    It added, “In 2017, the FGN shifted its focus by borrowing mainly from the external sources, thereby reducing its participation in the domestic debt market so as to create ample space for the private sector to access credits, and also as part of its debt strategy to reduce its borrowing cost and reduce pressure on investable funds in the domestic market with the aim of depressing borrowing cost.

    “Between February and April 2017, the DMO successfully issued Eurobonds for a total of $1.5bn for a tenor of 15 years in two tranches ($1bn Eurobond and an additional $500m Eurobond), under the $4.5bn Global Medium-Term Note Programme.

    “These two Sovereign Eurobonds became the first foreign currency denominated Bonds to be listed at The Nigerian Stock Exchange and the FMDQ OTC PLC.

    “In November, 2017, $3bn Eurobonds were also issued: 10-year $1.5bn and 30-year $1.5bn. The issuance of the 30-year Note was a landmark achievement as the tenor represents the first by a Sub-Saharan African country other than South Africa, and importantly establishes the bases for long-term infrastructure financing, which is the priority of the present government.”

    According to the report, in the same year, the Federal Government also issued its first $300m Diaspora Bond in the International Capital Market to part finance the 2017 budget.

    The debut Diaspora Bond offered Nigerians resident abroad the opportunity to partner with the government in its efforts to stimulate economic growth.

    The DMO said that the bonds became the first issued by an African nation aside South Africa, which was registered with the US Securities and Exchange Commission.

  • FG floats N100bn 2nd tranche Sukuk bond in December

    FG floats N100bn 2nd tranche Sukuk bond in December

    Ms Patience Oniha, Director-General, the Debt Management Office (DMO), on Thursday expressed optimism that the second tranche of N100 billion sukuk bond would be floated before the end of 2018.
    Sukuk or Islamic Bond is a financial instrument structured to generate returns to ethical investors without infringing on the Islamic law, which forbids interest payments.
    Oniha told the News Agency of Nigeria in a telephone interview that the DMO had made significant progress to ensure successful issuance of the bond before year end.
    “June was when the budget was approved and Sukuk is a project that was also approved in the budget.
    “We will float it; we have made significant progress; we will issue it this year,’’ she said.
    The director-general said the second tranche would be specifically for infrastructure development just like the first one issued in September 2017.
    Oniha said that the DMO was working with the Ministry of Power, Works and Housing on the projects earmarked for the second tranche of the N100 billion Sukuk bond.
    She said that the successful outcome of the first tranche made the Federal Government do more to strengthen infrastructure development.
    She also expressed optimism that the second tranche would be oversubscribed, based on the feelers from investors and the public.
    “We still have auctions regularly, we issue FGN Bonds and they have been oversubscribed.
    “So, whether liquidity is tight or not, we have got good demands.
    “Don’t forget we are selling good products when we do Treasury Bills and FGN Bonds.
    “But in terms of sukuk, I think from the feelers we have got from investors and the public, it is a product the people want to associate with.’’
    She noted that people would be more enthusiastic about the Sukuk because it’s for infrastructure.
    The federal government in September 2017 issued a Seven-Year N100 billion maiden Sukuk (bond).
    The Sukuk was offered at N1,000/unit (minimum of N10,000 or 10 units) as a regular bond but represents an ownership interest in the asset to be financed rather than a debt obligation.
    Some of the roads funded by the bond include the Ibadan-Ilorin Road, Kolo-Otuoke-Bayelsa-Palm Road, Enugu-Port/Harcourt Road, Kaduna Eastern By-Pass, Kano-Maiduguri Road and Loko-Oweto Bridge over River Benue, among others.