By Dipo Olowookere
The Debt Management Office (DMO) this Wednesday was at the local bond market to auction Federal Government of Nigeria (FGN) bonds worth N150 billion to investors.
During the exercise, participants showed increased appetite for the long-dated debt instrument as evident in the value of subscriptions received for the 30-year bond put up for sale.
The debt office had gone to the market to sell N50 billion worth of the paper, but results from the auction showed that subscribers staked N115.09 billion on the note, indicating a subscription of 230.18 percent.
A statement released by the DMO said it also received considerable offers for the two other tenors; the 5-year and 10-year. The agency also auctioned N50 billion each for the bonds at the exercise.
It noted that total subscriptions received through competitive bids for the instruments were N252.35 billion, indicating a subscription level of 168.23 percent.
However, successful bids were allotted at the rate of 12.00 percent for the 5-year, 12.93 percent for the 10-year and 13.39 percent for the 30-year bonds. The allotment rates indicate a significant decline from the rates at which the bonds were issued at the October 2019 FGN bond auction.
According to the DMO, the total amount allotted for competitive bids was N157.93 billion across the three tenors, with N95.00 billion allotted through non-competitive bids for all the tenors at the same rates as the competitive bids.
Overall, the sum of N252.93 billion was allotted to investors at the auction through both competitive and non-competitive bids.
