The Debt Management Office (DMO) played a pivotal role in the Nigerian financial landscape during March 2024. Let’s delve into the key highlights from their auctions, bond issuances, and market activities.
Treasury Bills (T.bills) Auction
- The DMO successfully auctioned Treasury Bills valued at an impressive N2.669 trillion.
- This amount represents a 3.07% month-on-month (MoM) increase compared to the T-bills auctioned in February 2024 (N2.589 trillion).
FGN Bonds Issuance
- The DMO also ventured into the issuance of Federal Government of Nigeria (FGN) Bonds.
- The total value of FGN Bonds sold was N608.86 billion, which includes N133.20 billion in non-competitive bids.
- These bonds were issued through a new three-year bond and the re-opening of seven-year (7Y) and ten-year FGN bonds in March 2024.
- Notably, the total bond sale was oversubscribed by 35.30%.
Impact on Debt Structure
- Debt Reduction: By converting loans and payables into shares, the company aims to reduce its overall debt burden. This move is particularly crucial in managing its financial obligations.
- Inter-Company Loans: The debt-to-equity conversion directly addresses the company’s inter-company loans, including those owed to its parent company, Heineken N.V..
- Amount Due to Related Parties: Apart from inter-company loans, Nigerian Breweries also owes amounts to related parties. These related parties typically include key management personnel, directors, subsidiaries, and associates. The total amount due to related parties for FY 2023 stands at approximately N166.1 billion.
Central Bank of Nigeria (CBN) OMO Auctions
- In March 2024, the CBN conducted open market operations (OMO) auctions, selling OMO bills worth N1.056 trillion in the primary market.
Corporate Bonds and Commercial Papers
- Corporate Bonds: No new listings of non-sovereign bonds occurred on the FMDQ Exchange in March 2024. However, corporate bonds worth N15.00 billion matured and were redeemed, resulting in a 0.68% MoM decrease in the value of Non-Sovereign Bonds outstanding (now at N2.194 trillion).
- Commercial Papers (CPs): Quoted CPs were issued by institutions from various sectors, including Financial Services, Manufacturing, Retail, Health & Pharmaceuticals, Agriculture, Technology, and Chemical Supply & Oil Field Service. Additionally, N39.26 billion CPs matured and were redeemed, leading to a 9.28% MoM increase in the total outstanding value (now at N864.11 billion) in March 2024. 📊💰