The Federal Government is targeting to raise N1.2 trillion from bonds in the third quarter (July and September) of 2023.
In Q1, 2023 the Debt Office offered N1.08 trillion, and domestic investors purchased N2.61 trillion worth of FGN Bonds, but N1.89 trillion was eventually allotted as the federal government intensified borrowing from local investors to bridge the budget deficit. The summary of the Q2, 2023 bond issuances is expected to be published by the end of this month.
According to the third quarter calendar, the DMO is rolling out four bonds on July 17, 2023, all of which are re-openingof previously issued bonds. Another set of four re-opening bonds will be issued on August 14, and September 11.
Re-opening a bond means that additional amounts of a previously issued bond are being issued. Re-opened bonds have the same maturity date and interest rate as the original bonds, but they are sold on different dates and usually at different price.
On July 17, the Debt Office will re-open the 14.55 percent April 2029 FGN bond valued between N80 billion and N100 billion with a 10-year tenor but term-to-maturity of five years, nine months.
The same day, the DMO is expected to re-open a 14.70 percent June 2033 FGN bond valued between N80 billion and N100 billion, with a 10-year original tenor and term-to-maturity of nine years, 11 months.
DMO will also re-open a 15.45 percent June 2038 FGN bond valued between N80 billion and N100 billion, with a 15-year original tenor, and a term-to-maturity of 14 years, 11 months.
Again, on July 17, the office will re-open a 15.70 percent, June 2053 FGN bond, valued between N80 billion and N100 billion, with a 30-year original tenor, and term-to-maturity of 29 years, 11 months.
The DMO says it will also, on August 14, re-open four previously issued bonds including the 14.55 percent, April 2029 FGN bond valued between N80 billion and N100 billion, with a term-to-maturity of five years, eight months.
On the same day, it will re-open the 14.70 percent, July 2033 FGN bond valued between N80 billion and N100 billion, with term-to-maturity of nine years, and 10 months.
It will also re-open the 15.45 percent June 2038 FGN bond valued between N80 billion and N100 billion on Aug. 14; this time, with a term-to-maturity of 14 years, 10 months.
The DMO will also re-open the same day a 15.70 percent,June 2053 FGN bond valued at between N80 billion and N100 billion, with a new term-to-maturity of 29 years, 10 months.
On Sept. 11, the DMO said it would re-open the 14.55 percent April 2029 FGN bond, valued between N80 billion and N100 billion; with a new term-to-maturity of five years, seven months.
On the same day, it will also re-open the 14.70 percent, June 2033 FGN bond valued between N80 billion and N100 billion; with a term-to-maturity of nine years, nine months.
On the same date, it will re-open the 15.45 per cent, June 2038 FGN bond, valued between N80 billion and N100 billion, with a term-to-maturity of 14 years, nine months.
Finally, on Sept 11, the DMO will re-open the 15.70 percent, June 2053 FGN bond, valued at between N80 billion and N100 billion; with term-to-maturity of 29 years, and nine months.
The government borrowing plan is coming at a time of increasing public outcry against the government’s debt profligacy. Nigeria’s public debt stock (comprising FGN, the 36 States, and FCT) as of March 31, 2023, stood at N49.85trn ($108.30bn).
This does not include the Central Bank of Nigeria’s (CBN’s) Ways & Means loans to the federal government which DMO said it is going to factor in by June. When CBN’s Ways & Means is factored in, the total debt stock will shoot up to N72.569 trillion. As of December 31, 2022, the country’s total public debt stock had stood at N46.25 trillion ($103.31bn).
CBN’s Ways & Means of N22.719trn was approved in May 2023, and according to the Debt Office, this will be included in the country’s debt stock by June, having been approved by the National Assembly for inclusion.
