FG Redeems $413m Treasury Bills from Eurobond Proceeds

The federal government has paid off about N130 billion worth of treasury bills maturing this week instead of rolling over the debt as it has done in the past, traders said.

The Director General, Debt Management Office, Patience Oniha, who confirmed the payment to Reuters, said a treasury auction calendar for March would be released next week.

Nigeria issued a $2.5 billion Eurobond last month to help redeem portions of its treasury bill portfolio to lower costs.

It has been working to lower its costs, particularly as inflation fell for the 12th time in a row in January.

Treasury yields have been falling on expectations that the government will sell less debt at its second quarter auction after it sold the Eurobond. Traders expect rates to fall further after the pay off.

The DMO sold N129.99 billion worth of treasury bills at an auction on Wednesday, around half the amount it advertised in its calendar at the lower-range of the yield curve.

Investors demanded as high as 20 percent for the one-year bill which fetched 13.5 percent at the auction. The DMO sold the three-month bill at the lower-end of the curve at 11.85 percent.

Finance Minister Kemi Adeosun had last month said the country would redeem N762.5 billion worth of treasury bills.

Nigeria has a treasury bill portfolio of N2.7 trillion. It paid off N198 billion worth of bills in December, leading to rates dropping by around 300 basis points.