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Second 30-Year Bond Sale Records 336% Subscription

By Dipo Olowookere

At the May 2019 FGN Bond Auction held on Wednesday, May 22, 2019, the Debt Management Office (DMO) offered three instruments for 5, 10 and 30-year tenors to the investing public, with a total amount offered of N100 billion.

As with the April auction when the 30-year bond was first offered to the market, investors showed a stronger demand for the 30-year bond with subscriptions worth N100.91 billion received from subscribers compared with the N30 billion offered by the debt office, recording a 336 percent subscription rate.

According to the DMO, this clearly indicates its understanding on the needs and preferences of investors in terms of tenor, which informed its introduction of the 30-year bond.

Business Post reports that debt office issued the paper to investors at the exercise yesterday at the rate of 14.49 percent.

During the bond auction, the 5 and 10-year instruments were equally oversubscribed, with subscription of N45.98 billion and N124.22 billion respectively, compared with the N35.00 billion offered for each of the instruments.

In addition to the strong demand, interest rates demanded by investors also significantly declined for all the instruments compared to the April 2019 auction.

Allotments were made to successful bidders at 14.11 percent for the 5-year note and 14.24 percent for the 10-year paper.

At the end, the debt office allotted a total of N111.31 billion for the three instruments offered against the N100 billion auctioned.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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