The plan by the Nigerian government to raise an average of between N320b and N400b per month in bond sales has been described as too ambitious, which the debt market may find it difficult to absorb.
A schedule of the bond auction for the first quarter of 2023 seen by Daily Trust shows that the bonds are being re-opened, with each of them having a different term to their original maturities.
For instance, for January, the government will on the 30th re-open the 13.98% FGN FEB 2028, which has an original tenor of 10 years and currently has five years, one month to maturity.
The second bond for January is the 12.50%FGN APR 2032, with an original tenor of 15 years and now nine years and three months to maturity. The schedule says that the range of amount on offer for each of the bonds is between N80b and N100 b for each month.
The third offer for the month is the 16.2499% FGN APR 2037 bond, with a 20-year tenor and currently has 14 years and three months to maturity.
The fourth bond for January is 14.80%FGN APR 2049, a 30-year paper having 26 years and three months to maturity. According to the schedule, each of the bonds is to be re-offered in the succeeding month, with one month less in terms of maturity from the previous month.
February 13 is the auction date for the second month’s offer, while March 20 is the auction date for the third month. However, market analysts have warned that the market may not have the capacity to absorb this quantum of issuance within the period, a bond analyst has said. “N320b to N400b a month? The market will scatter,” the bond trader said to Daily Trust by phone from Lagos.
