The Nation Newspaper

Tag: Debt Management Office

  • FG makes N343.05m from savings bond in July– DMO

    The Federal Government said it made N343.05 million from sales of savings bond in July.

    The results of the sales published on the website of the Debt Management Office (DMO) on Wednesday in Abuja, showed that N79.98 million was allotted for July 2020 at 10.48 per cent.

    It also indicated that N263.06 million was allotted at 11.48 per cent for July 2021 papers.

    According to the result, the sales were made after 288 successful subscriptions.

    Savings bond issuance is expected to help finance the nation’s budget deficit.

    Read Also: FGN April bonds oversubscribed by 292%

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

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

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

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

    The bond is 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 will also enable all citizens to participate and benefit from the favourable returns available in the capital market.

    NAN

  • DMO: $2.5b refinancing cash won’t raise public debt

    DMO: $2.5b refinancing cash won’t raise public debt

    The Debt Management Office ( DMO ) has said the Federal Government’s plan to borrow $2.50 billion externally will not increase overall public debt stock.

    In a statement released yesterday, the debt office said the fund will be used to rebalance the Federal Government’s debt portfolio by increasing the external component while reducing the domestic component.

    This, it added, is in line with Nigeria’s Debt Management Strategy, which targets 40:60 ratio for external to domestic debt from the current position of about 25:75, respectively.

    Read Also: What Nigeria stands to gain from $3b Eurobond, by DMO chief

    On the use of proceeds and benefits of the refinancing plan, it said: “The proceeds of the planned $2.50 billion will be converted to naira and used to redeem relatively more expensive domestic debts. This is expected to save about N64 billion per annum in interest cost which will help to reduce the debt service/revenue ratio and free up the fiscal space for other priorities of government”.

    It disclosed that in December 2017, the government redeemed matured Nigerian Treasury Bills (NTBs) with proceeds of $500 million Eurobonds issued in November last year. Apart from saving about N17 billion per annum in debt service cost, there was also a significant drop in the bid rates at the auctions of both NTBs and Federal Government of Nigeria (FGN) Bonds in December 2017 and January 2018 from a range of 16 per cent to about 13.5 per cent.

    This translates to savings for government on new borrowings, reduction of pressure on lending rates in the economy with positive impact on job creation and poverty reduction.

    The debt substitution will also help to lengthen the maturity profile of the portfolio and leave more borrowing space for the private sector to access credit to grow the real sector.

     

  • Fed Govt eyes $2.5b Eurobond sale

    The Federal Government will consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost, the head of the Debt Management Office (DMO), Patience Oniha, said.

    She said the country will also try to get back into the JP Morgan Government Bond Index (GBI-EM), with improving liquidity in the local currency market. She said a Eurobond placement will depend on market conditions, pricing and tenor.

    “We are looking the issue probably first quarter depending on what the advisers say and subject to the market conditions,” the DMO director general told Reuters.

    Nigeria could also look at a possible syndicated loan as an alternative, Oniha said, adding that the issue is part of a $5.5 billion fund raising program approved by parliament last year.

    Nigeria has said it plans to refinance $3 billion worth of a local treasury bill portfolio of 2.7 trillion naira ($8.9 billion).

    In November, Nigeria sold $3 billion in Eurobonds, part of which it used to fund its 2017 budget, and then paid off N198 billion in treasury bills.

    Oniha said local debt yields have started to fall after it paid off the bills in December, though debt was still attractive especially to foreign funds looking at emerging market bonds.

    Meanwhile, investors have oversubscribed the first auction of federal government Bond conducted by the DMO in the year.

    This indicates that the capital market still have strong appetite for the FGN Bond despite recent developments in the capital market.

    The oversubscribed bonds will mature in July 2021 and others in March 2027. The 14.50per cent FGN bond expected to mature in July 2021 was allotted at a rate of 13.3800per cent, while the 16.2884 per cent FGN March 2027 bond was allotted at 13.4910 per cent. Both bonds were oversubscribed, by N150 billion, representing 136 percent.

    Giving that the subscription level was higher for the 10-year benchmark bond, this indicates investors’ preference for longer dated instruments.

     

     

     

     

  • FG savings bond opens for investors at high yields

    FG savings bond opens for investors at high yields

    The Federal Government has offered for subscription two-year and three-year Savings Bonds to investors at 13.535 per cent and 14.535 per cent, respectively. The monthly offer opens today and ends on Friday, August 11.

    A statement from the Debt Management Office (DMO) said the two-year bond will be due in August 2019, while the three-year bond has a maturity date of August 2020.

    The offer has a minimum subscription of N5,000 with increases thereafter in multiples of N1,000 up to a maximum subscription of N50 million.

    The debt office said the bond is backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders.

    The DMO stated that the savings bond will help broaden the country’s funding base. The Federal Government of Nigeria (FGN) Savings Bond is targeted primarily at retail investors to enable them to contribute to the development of the country, while also earning good returns on a safe investment in a Sovereign instrument.

    The FGN Savings Bond was launched by the DMO in March 2017 and is issued every month through stockbroking firms trading on the Nigerian Stock Exchange. The FGN Savings Bond is promoting the savings culture in the country and enhancing financial inclusion.

    Since its introduction in March, the FGN Savings Bond has attracted a lot of new investors to the FGN Securities market with its attractive features. The income earned on the FGN Savings Bond is exempted from taxes and it can be traded in the secondary market on the Nigerian Stock Exchange.

  • APC diaspora commends Buhari on bailout package

    APC diaspora commends Buhari on bailout package

    The All Progressive Congress, APC Scandinavia on Thursday commended President Muhammad Buhari for the approval of the inclusive relief packages as a bailout for the states of the federation.

    Speaking through the National Coordinator, Ayoola Lawal in a statement, APC Scandinavia described the package as one that will enable the three tiers of government to clear all salaries owed in arrears to hardworking Nigerian workers across the nation.

    Lawal further stressed that the bailout, if properly managed, will enable the states and the local councils meet their payroll responsibilities further.

    “The packages will not only go a long way in ameliorating the financial sufferings of Nigerian workers across the nation, who have without monthly payment of their salaries for several months but also alleviate the psychological pain associated with working without the ability to meet basic needs.

    “The packages include sharing of dividend paid to the Federation Account by the Nigeria Liquefied Natural Gas Company (NLNG), a debt relief program designed by the Debt Management Office which will help states restructure their commercial loans which is currently put at over N660 Billion, and extend the lifespan of such loans while reducing their debt-servicing expenditures.

    The National Coordinator further suggested a Central Bank-packaged special intervention fund that will offer financing to the states, ranging from N250 Billion to N300 Billion. “The CBN package be a soft loan available to states for the purposes of paying the backlog of salaries.

    “Any individual or opposition party that thinks Nigerians are gullible to beg them to come to power in 2019 after several years of looting the collective wealth of the nation and psychological torture of the Nigeria people is a jerk.

    “We in APC Scandinavia are very proud and delighted that President Buhari is showing Nigerians and the International Communities that he is a man of his words and a clear pointer that Nigerians made the right choice of voting the right party to govern them.

    “The promises made by APC and the President during the election campaigns are not the usual mantra of the past political elites of PDP. The promises are genuinely crafted out of justifiable demands and needs of an average Nigerian and a nation in dare need of real and authentic leadership,” he said.

    he therefore called for apositive change in all areas of governance, sustainable growth and development in the entire country which is devoid of political affiliations.

    “Civil servants will again see dignity in their labour and contributions to the national growth after several months of unpaid salaries and eroding pride as a civil servant.

    “We implore the governors to manage properly the packages and maximize the opportunities to deliver better governance to their constituencies,” he urged reiterating the need for Nigerians home and abroad to continue their supports, constructive criticism and prayer for the President Buhari led administration, the NASS, the governors and the APC leadership.

    This is maintained will help the ruling party to further deliver on their promises for a better Nigeria. “Welcome, all to a New Nigeria of our dream,” he summed.

  • ‘Nigeria’s external debt hits $9.4b’

    ‘Nigeria’s external debt hits $9.4b’

    Nigeria’s external debt stock profile stood at $9.4 billion on March 31, this year, the Debt Management Office (DMO), information posted on DMO said yesterday.

    The figure showed a decrease of about $300 million  from the $9.7 billion that the country owed at December 31 last year.

    According to information on DPR website, the highest debt is owed the World Bank Group. International Development Association  $5.6billion and International Fund for Agricultural Development, $89.4million

    It further stated that Nigeria owes African Development Bank (AfDB) $200 million and the African Development Fund (ADF), $513.7 million. The ADF debt was incurred through the AfDB Group.

    Nigeria also owes Arab Bank Economic Development for Africa $4.4 million, while its debts to European Development Fund and Islamic Development Bank are $75.1 million and $19.6 million respectively.

    The record also showed that the country’s indebtedness through bilateral agreement to Exim Bank of China and French Development Agency are $1.2 billion and $140.2 million respectively.

    It further stated that Nigeria’s external debt stock through government’s issuance of Eurobond stood is $1.5 billion.