Nigeria plans to re-issue its five- and 10-year bonds in the last quarter of the year to raise up to 270 billion naira after JP Morgan’s index on Wednesday delisted half of the maturities belonging to Africa’s biggest economy.
The 10-year bond, among those to be delisted on the influential index, edged higher to yield 15.09 percent after the Debt Management Office (DMO) on Wednesday released its calendar showing it will re-introduce the benchmark paper, which was not issued in the third quarter.
The DMO said it will sell between 60 billion naira and 90 billion naira each in five- and 10-year bonds in each of the remaining three months of the year as reopenings of outstanding maturities.
JP Morgan removed half of Nigerian bonds listed on its emerging markets bond index (GBI-EM), as part of its month-end index rebalancing, cutting the West African country’s weight to 0.79 percent.
The U.S. bank had warned Nigeria this month that it would drop it from its index, citing a lack of liquidity and currency restrictions.
Traders said bond yields were muted on Wednesday as foreign buyers had cut their exposure to 0.69 percent ahead of the index expulsion.
The 2024 bond to be issued from October will pay a coupon of 14.20 percent while the 2020 paper will pay 15.54 percent.
The central bank on Wednesday said the banking system had enough liquidity to take up what foreign investors might sell after JP Morgan removed Nigeria from its bond index.