DEBT MANAGEMENT OFFICE NIGERIA UPDATE ON THE DEBT
DEBT MANAGEMENT OFFICE NIGERIA UPDATE ON THE DEBT MANAGEMENT OFFICE ACTIVITIES FOR FIRST QUARTER 2017 BY DEBT MANAGEMENT OFFICE AT THE MEETING OF THE CAPITAL MARKET COMMITTEE, LAGOS MAY, 2017
DEBT MANAGEMENT OFFICE NIGERIA TABLE OF CONTENTS q FGN DOMESTIC BOND MARKET. q FGN SAVINGS BOND. q UPDATE ON THE PROPOSED SUKUK ISSUANCE. q EUROBOND ISSUANCE.
FGN DOMESTIC BOND MARKET DEBT MANAGEMENT OFFICE A. NIGERIA Primary Market Table 1: Auction, Subscription and Allotment of FGN Bonds (N’ Billion) Period Auction Subscription Rate (%) Allotment January 130, 000. 00 235, 050. 00 180. 81 214, 950. 00 February 110, 000. 00 337, 030. 00 306. 39 160, 000. 00 March 130, 000. 00 216, 380. 00 166. 45 160, 000. 00 Total 370, 000. 00 788, 460. 00 213. 10 534, 950 Notes New Issues: The DMO issues 10 -year Bond in Q 1, 2017: 16. 2884%FGN MAR 2027. B. Secondary Market Table 2: OTC Market and The Nigerian Stock Exchange (N’ Million) Period Number of Transactions Volume Consideration Number of Transactions OTC Market Volume Consideration The NSE January 33, 217. 00 10, 823, 535. 50 10, 169, 480, 519, 266. 00 22 76, 048 73, 154, 884. 59 February 22, 676. 00 7, 283, 689. 50 6, 709, 090, 675, 487. 00 22 36, 758 32, 293, 136. 69 March 29, 141. 00 7, 299, 720. 00 7, 412, 408, 631, 260. 00 34 36, 365 34, 325, 613. 78 Total 85, 034. 00 25, 406, 945. 00 24, 290, 979, 826, 013. 00 78 149, 171 139, 773, 635. 06
INTRODUCTION OF FGN SAVINGS BOND DEBT MANAGEMENT OFFICE NIGERIA Issuance of Federal Government of Nigeria Savings Bond The DMO on behalf of the Federal Government of Nigeria introduced a retail bond into domestic bond market. Purpose v v Deepen the national savings culture. Diversify funding sources for the Government. Provide opportunity to all citizens irrespective of income level to contribute to National Development. Enable all citizens participate in, and benefit from the favourable returns available in the fixed income market. Debut Issuance Statistics Date of Issuance: Amount: Tenor: Coupon: Interest Payment: No. of Subscription: Listing: Mode of Distribution: March 13, 2017. N 2. 068 Billion. 2 -year. 13. 01% per annum. Quarterly. 2, 575. The Nigerian Stock Exchange. Distribution Agents (Accredited Stockbroking Firms). 4
DEBT MANAGEMENT OFFICE UPDATE ON THE PROPOSED SUKUK ISSUANCE NIGERIA As part of the DMO’s efforts to diversity the FGN securities investor base and the promote financial inclusion, the Government approved the Framework for the issuance of Sovereign Sukuk in the domestic and international capital markets. The Framework, which was developed by the DMO in collaboration with the Central Bank of Nigeria, the Securities and Exchange Commission (SEC) and Infrastructure Regulatory Commission has received the concurrence of the CBN and Office of the Accountant-General of the Federation as stipulated by law. Implementation of Framework The DMO is in the process of appointing Transaction Parties (TPs) through Open Competitive Bid in line with requirements of Public Procurement Act, 2007. It is important to note that the Government intends to use the proceeds of the issuance to fund specific infrastructural projects identified in the Appropriation Act that meet the requirements of Non-Interest Commercial Jurisprudence. This is in line with the Government’s policy of purposeful borrowing, accountability and speedy development of infrastructure projects for sustainable growth and development. Subject to the passage of the 2017 Appropriation Act, the DMO plans to issue debut sovereign Sukuk before the end of the first-half 2017. 5
DEBT MANAGEMENT OFFICE EUROBOND ISSUANCE NIGERIA Nigeria Accessed the International Capital Market (ICM) in Q 1, 2017. The Federal Republic of Nigeria successfully established a USD 4. 5 Billion Global Medium Term Note (MTN) and issued USD 1. 00 Billion Eurobond offering under its newly established Federal Government of Nigeria Global Medium Term Note (FGMTN) Issuance Programme on Federal 16, 2017 amidst volatility in emerging and frontier securities markets. The Notes was about 8 times oversubscribed demonstrating strong market appetite for Nigeria. Issuance Statistics Date of Issuance: February 16, 2017. Amount: USD 1. 00 Billion. Tenor: 15 -year. Coupon/Issue Yield: 7. 875% per annum. Maturity Date: February 2032. Subscription: USD 7. 8 billion, approximately 800 percent oversubscription. Listing: The London Stock Exchange, The Nigerian Stock Exchange and the Financial Market Dealer Quotation OTC Securities Exchange. Use of Proceed: Funding of capital expenditures in the 2016 Budget. Yield (as at March 31, 2017): 7. 348%. 6
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