The Federal Government of Nigeria through the Debt Management Office has revealed that it received total bids of N134.056 billion for December 2020 bond offer worth N60 billion, indicating it was oversubscribed by N74.056 billion (over 220%).
This is according to a disclosure by DMO via its website, as seen by Nairametrics.
Nairametrics gathered that the oversubscription is sequel to higher rates for December 2020 at 6.945% and 7.000% for the 15-year and 25-year FGN Bonds, compared to the rates of 5.000% and 5.785% at the last auction in November 2020.
What you should know
- FGN Bonds are debt securities issued by the Debt Management Office (DMO) for and on behalf of the Federal Government and backed up by its ‘full faith and credit’.
- The FGN has an obligation to pay the bondholder the principal and agreed interest (tax-free) as and when due.
- The FGN issues bonds for numerous reasons which include; financing government’s fiscal deficits, diversifying government financing sources, deepening savings and investment culture in the country amongst others.
