Investors Oversubscribe February 2020 FGN Bond Sale

By Dipo Olowookere

The February 2020 FGN bond auction held on Wednesday, February 19, 2020, was significantly oversubscribed by investors, a statement from the Debt Management Office (DMO) revealed.

During the exercise, the debt office auctioned N140 billion worth of the papers across three maturities; 5-year tenor of N45 billion, 10-year tenor of N45 billion and 30-year tenor of N50 billion.

According to the statement, subscriptions received through competitive bids for the three instruments was N398.20 billion, indicating a total subscription level of 284.43 percent.

The DMO also said it received non-competitive bids worth N60 billion from subscribers, making the total subscriptions from both competitive and non-competitive bids to the sum of N458.20 billion.

A breakdown of the competitive subscriptions showed that the sum of N78.43 billion or 174.30 percent was received for the 5-year bond; the sum N95.70 billion or 212.67 percent for the 10-year bond and the sum of N224.07 billion or 223.15 percent for the 30-year bond.

It further said successful bids were allotted at the rate of 8.75 percent for the 5-year, 10.70 percent for the 10-year and 12.15 percent for the 30-year bond, which indicate a decline from the allotment rates of 9.85 percent, 11.13 percent and 12.56 percent for the 5-year, 10-year and 30-year bonds, respectively, at the January 2020 FGN bond auction.

The total amount allotted for competitive bids was N100 billion across the three tenors, while a total sum of N60 billion was allotted through non-competitive bid for the 5-year and 10-year tenors, at same rates with the competitive bids, which made the total allotment from competitive and non-competitive bids to N160 billion.

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. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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