By Dipo Olowookere
The Debt Management Office (DMO) on Wednesday auctioned some FGN bonds to investors at the local debt capital market.
Debt instruments worth N150 billion were put up for sale during the session, according to details of the exercise analysed by Business Post.
In the summary of the bond sale released by the DMO, it was stated that N50 billion worth of 10-year paper, N50 billion worth of 15-year paper and N50 billion worth of 30-year paper were offered to investors, all re-opening.
This means that in an actual sense, the 10-year note had a maturity of 5 years and 9 months as at when it was auctioned on Wednesday. The 15-year note was with a maturity of 13 years and 9 months, while the 30-year note was with a tenor of 28 years and 9 months.
It was observed that investors showed a strong appetite for the long-dated instrument, with N223.8 billion staked on the paper in 197 bids.
The debt office also received N127.5 billion for the mid-dated bond from investors in 138 bids, while the short-dated bond recorded N66.2 billion subscriptions in 79 bids.
Business Post reports that at the previous exercise held on May 21, bond traders staked N37.2 billion on the 10-year paper, N57.4 billion on the 15-year paper and N187.4 billion on the 30-year paper.
When the subscription rate for the two months is compared, the month of June recorded N417.5 billion while May had N282.0 billion, indicating that the demand for the form of fixed income investment rose by 48.1 per cent.
As for the allotment, the debt office allotted N50.8 billion for the 10-year note, N103.9 billion for the 15-year note and N171.1 billion for the 30-year note, while for the non-competitive sale, the agency, which manages the debt profile of Nigeria, sold N3.5 billion for the short-dated instrument, N1.0 billion for the mid-dated instrument and nothing for the long-dated instrument.
However, the coupon rates for the three maturities were sliced by the DMO during the session.
It was observed that the 10-year FGN bond cleared at 12.74 per cent, lower than the 13.10 per cent it cleared last month.
Also, the 15-year FGN bond cleared at 13.50 per cent, lower than 14.00 per cent of the previous exercise, while the 30-year FGN bond was sold at 13.70 per cent, lower than the 14.20 per cent it cleared a month ago.
Adedapo Adesanya