ABSTRACT
Chapter 8 analyses Nigeria’s fixed‐income or debt market environment and trading mechanisms, with government bonds dominating issuance and trading while corporate debt market is still in its infancy. The underwriting process for issuing bonds are similar to that of equity underwriting but with a shorter period from origination to final execution. Bonds are usually issued through processes including auction, which requires competitive bidding, book-building used for price discovery, syndication and private placements. Credit agencies play a key role in rating the issuer and the bond, which will affect the credit spread.
The Debt Management Office (DMO) coordinates and manages Nigeria’s debt on behalf of the federal government of Nigeria. Its creation has helped to institutionalize public debt management in Nigeria. The DMO centralizes and coordinates the country’s debt recording and management activities, including debt service forecasts, debt service payments and advising on debt negotiations as well as new borrowings. The DMO plays crucial roles in the debt capital market in Nigeria.
