Investors Snub DMO’s August N145bn Bond Sale
By Dipo Olowookere
The FGN bond auction for the month of August 2019 held yesterday suffered a low subscription rate when compared with the previous exercises, Business Post reports.
The Nigerian government, through the Debt Management Office (DMO), had approached the local bond market to borrow the sum of N145 billion from investors.
However, at the Naira-denominated exercise, traders staked N139.58 billion for both competitive and non-competitive bids, with the former comprising N95.09 billion and the latter N44.49 billion.
During the bond auction, the debt office offered N40 billion for the 5-year paper, N50 billion for the 10-year note and N55 billion for the 30-year instrument.
Results from the sale showed that the DMO received subscriptions worth N10.41 billion for the 5-year bond, N37.47 billion for the 10-year bond and N47.21 billion for the 30-year bond for the competitive bids.
However, the debt office allotted N2.05 billion for the short-tenor instrument, N2.68 billion for the mid-tenor instrument and N10.30 billion for the long-tenor instrument.
For the non-competitive allotment, the DMO said it sold N12.00 billion for 5-year bond, N15.00 billion for the 10-year note and N17.50 billion for the 30-year paper to subscribers.
According to the DMO, allotments were made to successful bidders at the rate of 14.29 percent for the 5-year bond maturing April 27, 2023, 14.39 percent for the 10-year bond maturing April 26, 2029 and 14.59 percent for the 30-year bond maturing April 26, 2049.
Every month, the debt office go to the local bond market to borrow from investors to fund part of the budget.