First 2018 FGN Bond Auction Records 136% Subscription
By Modupe Gbadeyanka
The first FGN bond auction for January 2018 recorded an oversubscription of 36 percent, the Debt Management Office (DMO) has said.
The exercise was conducted on Wednesday by the debt office on behalf of the Federal Government of Nigeria.
Two bonds were offered to investors at the exercise by the DMO and they were the 14.50 percent FGN JUL 2021 and the 16.2884 percent FGN MAR 2027.
It was gathered that both bonds were oversubscribed, with total subscriptions of N150 billion, a subscription rate of 136 percent.
Business Post reports that the subscription level was higher for the 10-year benchmark bond, indicating investors’ preference for longer dated instruments.
During the exercise, the debt office allotted a total of N110 billion, which was the amount offered in its circular released ahead of the auction.
The 14.50 percent FGN JUL 2021 was allotted at a rate of 13.3800 percent, while the 16.2884 percent FGN MAR 2027 was allotted at 13.4910 percent.
It would be recalled that the DMO had released its Issuance calendar for Q1, 2018 last week with the details of its auctions for the quarter.
The DMO had stated then that its issuance programme is structured to ensure that the funds required to finance the budget deficit would be fully provided in line with its mandate.