Nigeria sold 10 and 20-year Naira-denominated bonds at 16.25%, the same as the inflation rate, at an auction on Wednesday.

The Debt Management Office (DMO) sold less of the 5-year bond at the auction than it initially offered, as the yields on offer failed to attract investors seeking higher returns on the debt, auction data showed.

DMO sold a total of 105.96-billion-Naira worth of 5, 10 and 20-year bonds at the auction.

The amount raised was less than the 135 billion Naira it had initially proposed to issue at the auction.

A total of 47.01 billion Naira of the 10-year paper was raised at 16.25% against 16.19% previously, while 55.05-billion-Naira worth of the 20-year bond was sold at 16.25%, compared with 16.19% previously.

It sold 3.90-billion-Naira worth of the five-year debt at 16.24% compared with 16.19% at last month's auction. The amount raised was short of the 35 billion Naira initially offered by the DMO.

"The low demand for the 2021 bond was a reflection of the level of liquidity in the market and the pricing of the bond which was lower than the prevailing rate at the secondary market," a senior fixed income dealer told Reuters.

The dealer said that while the 2021 paper was trading around 16.30% at the secondary market, the debt office sold it at 16.24%, which investors considered unattractive to them.

The debt office, however, sold more of the 2037 paper at the auction.