FGN Bond Nets N626.498bn, Oversubscribed by 300%


Ndubuisi Francis in Abuja

The January 2020 FGN Bond auction by the Debt Management Office (DMO) which was conducted Wednesday was oversubscribed by more than 300 per cent, further demonstrating the growing appetite by investors for the debt instrument.

According to a statement released by the, DMO, N155 billion of three instruments (five-Year, 10-year and 30-year tenors) were offered to investors at the auction.

It disclosed that subscriptions received through competitive bids for the three instruments at the auction was N624.498 billion, while the sum of N1.83 billion was received through non-competitive bid, making the total subscription received N626.328 billion.

Investor appetite for the 30-year bond continued to be strong, with subscription of N341.77 billion or 621 per cent compared to the N55.00 billion offered, while subscription for the 10-year bond was N201.98 billion or 404 per cent when compared with the N50.00 billion offered.

The DMO said successful bids were allotted at the rate of 9.8500 per cent for the five-Year, 11.1250% for the 10-Year and 12.5600 per cent for the 30-year bonds which indicate a significant decline from the rates of 11.0000 per cent, 12.0000 per cent and 13.0000 per cent for the 5-year, 10-year and 30-year bonds, respectively, at the December 2019 FGN Bond Auction.

The debt management and agency said the amount allotted for competitive bids was N409.992 across the three tenors, adding that the sum of N1.83 billion was allotted through Non-competitive bid for the 30-year bond– same rate with the competitive bids.

Overall, the sum of N411.822 billion was allotted to investors at the auction through both competitive and non-competitive bids.