Nigeria sells Treasuries at Higher Yield to Draw Funds

Nigeria raised 252.88 billion naira ($827 mln) at a treasury bill auction on Wednesday as investors piled demand into the higher yielding one-year debt, traders told Reuters on Thursday.

The central bank sold 177.22 billion naira of one-year debt at a rate of 13.7 percent. It auctioned 6.09 billion naira of three-month debt at 12 percent, and 69.57 billion naira of six-month maturity debt at 13.65 percent. Total subscription stood at 355.2 billion naira.

Traders said some offshore funds participated at the auction, helping boost dollar liquidity on the currency window for investors to keep naira rates stable. The bank has maintained tightened liquidity to attract foreign buyers.

Nigeria’s debt office plans to raise $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost.

It repaid 198 billion naira worth of treasury bills in December, instead of rolling them over, to lower costs.

Investors bid as high as 18.5 percent for the one-year paper. However, the government has been offering debt at lower yields to track declining inflation, which fell for the eleventh straight month in December, to 15.37 percent.