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Fed Govt to borrow N105bn via bonds – DMO

By The Citizen
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The Federal Government is planning to borrow the sum of N105bn ($527.9m) in local currency denominated bonds on May 11, the Debt Management Office (DMO) said on Wednesday

The DMO said that it would sell N50bn of a bond maturing in 2036, N40bn of paper maturing in 2026 and N15bn of debt maturing in 2020, using the Dutch auction system.

The results of the auction are expected to be released the following day.

All the bonds on offer are reopening of previous issues.

The DMO issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

The debt office is planning to borrow about N900bn locally to finance part of the N2.2tn deficit in its 2016 budget.

The Director-General, DMO, Dr. Abraham Nwankwo, had said the slump in crude oil prices in the international market  made a deficit budget inevitable this year, adding that the DMO was prepared to borrow on behalf of the government to fund the deficit.

Nwankwo dismissed the fears in some quarters that the government might not be able to borrow from the bond market to finance any shortfall in the budget because of the delisting of Nigeria from the JPMorgan Bond Index.

The Central Bank of Nigeria has said it is planning to borrow N1.07tn via Treasury  bills issuance in the second quarter of 2016.