By Modupe Gbadeyanka
The Debt Management Office (DMO) on Monday auctioned the federal government of Nigeria (FGN) bonds worth N225.00 billion to investors in the local bond market for the month of April 2022.
However, the DMO eventually allotted more than what was offered for sale during the exercise, selling N348.58 billion to competitive and non-competitive bond subscribers.
A breakdown of details of the bond auction indicated that the agency in charge of the nation’s debt profile allotted N219.88 billion worth of the debt instruments through competitive bids, while the non-competitive allotment was N128.70 billion.
The DMO took to the market three tenors during the exercise, with two re-opening and a fresh issue at N75 billion each. The first 10-year paper has an actual two years and 11 months maturity, the second 10-year note has 10 years maturity, while the 20-year paper has 19 years and 9 months maturity.
The agency received bids worth N108.43 billion for the old 10-year note, but only N74.28 billion was allotted at 10.00 per cent to 64 successful bidders.
As for the new 10-year paper, bond investors staked N78.22 billion, with N65.92 billion allotted to 141 subscribers at 12.50 per cent, while the 20-year tenor received bids valued at N222.76 billion with just N79.68 billion allotted to 95 bond traders at 12.90 per cent.
In addition, the second 10-year maturity recorded a non-competitive allotment of N90.00 billion, while the 20-year note received a non-competitive allotment of N38.70 billion.
According to the debt office, the settlement date for the bonds is Wednesday, April 27, 2022.
From the details, bond investors maintained a strong appetite for the 20-year bond because of its attractive coupon rate, though the new issue also has a competitive rate.
Adedapo Adesanya