Nigeria Business & Finance Updates

FG to auction N140bn bonds February 19

The Debt Management Office has said that the Federal Government would auction N140bn worth of bonds by subscription on February 19.

A circular by the DMO on Wednesday showed the breakdown of the figure to include a N45bn five-year reopening bond that would mature in April 2023 and be offered at 12.75 per cent; N45bn 10-year reopening bond that would mature in April 2029 and be auctioned at 14.55 per cent.

The last one is the N50bn 30-year re-opening bond expected to mature in April 2049 and be auctioned at 14.8 per cent.

According to the DMO, the settlement date for the bonds to be auctioned is February 21.

It would be recalled that the January 2020 FGN bond auction by the DMO on January 22, 2020 was oversubscribed by more than 300 per cent.

The DMO offered N155.00bn of three instruments (five-year, 10-year and 30-year tenors) to investors at the auction.

Subscription received through competitive bids for the three instruments at the auction was N624.49bn, while N1.83bn was received through non-competitive bid making the total subscription received N626.32bn.

In the January subscriptions, investor appetite for the 30-year bond continued to be strong, with subscription of N341.77bn or 621 per cent compared to the amount offered of N55.00bn, while subscription for the 10-year bond was N201.98bn or 404 per cent when compared with the amount offered of N50bn.

Successful bids were allotted at the rate of 9.8500 per cent for the five-Year, 11.1250 per cent for the 10-Year and 12.5600 per cent for the 30-year bonds which indicated a significant decline from the rates of 11.0000 per cent, 12.0000 per cent and 13.0000 per cent for the five-year, 10-year and 30-year bonds, respectively, at the December 2019 FGN bond auction.

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According to the DMO, the total amount allotted for competitive bids was N409.992 across the three tenors.

In addition, N1.83bn was allotted through non-competitive bid for the 30-year bond at same rate with the competitive bids.

Overall, it added, N411.822bn was allotted to investors at the auction through both competitive and non-competitive bids.

Punch

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