Nigeria: AMCON's N1 Trillion Bond Redemption to Boost Market Liquidity

30 December 2013

As the Asset Management Corporation of Nigeria (AMCON) redeems its N1 trillion series one, two, three and four bonds today, the liquidity position at the interbank market is being expected to be strengthened. AMCON had given holders of the fixed income instrument the option to decide if they wanted to be paid in cash or treasury bills. The move was to make sure that the exercise does not distort the financial system, by ushering excess liquidity in the market

AMCON bonds are held between the Central Bank of Nigeria (CBN) and other institutional investors such as pension fund administrators (PFAs), insurance companies and asset managers and banks. But at the end of the exercise, the CBN would be the only creditor to AMCON. In addition to the redemption of the AMCON bonds, treasury bills worth N77 billion expected to be redeemed via Open Market Operations (OMO) on Thursday would further boost the level of liquidity in the system.

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