The Debt Management Office (DMO) raised a sum of N269.15 billion from its November 2022 FGN Savings Bond issuance on behalf of the federal government, as subscriptions hit 152.9%.
This is according to information in the November 2022 FGN bond auction result, released by the Debt Management Office and seen by Nairametrics.
The debt instrument for November, which was issued across three tranches, saw a total subscription of N344.01 billion as against the initial offer of N225 billion, representing a subscription rate of 152.9%.
The breakdown: The 10-year 14.55% FGN Apr 2029 bond, recorded a total subscription of N39.45 billion as against an offer to raise N75 billion. However, N25.126 billion was raised at a marginal rate of 14.75%.
- The second tranche, which is also a 10-year bond, but with a maturity year of 2032, attracted a sum of N34.818 billion and 44 bids, which is lower than the initial offer of N75 billion. A sum of N27.118 billion was however allotted at a marginal rate of 15.2%.
- The 20-year tenor bond recorded a massive subscription rate of 359.6%, having attracted a total subscription of N269.73 billion, a huge difference from the initial offer of N75 billion. The marginal rate for the bond was stated at 16.2%, while it recorded 131 successful bids.
Rising interest rate: Owing to the increased interest rates in government debt securities, FGN bonds have been recording impressive subscriptions by the investing public as variable assets continue to remain volatile.
- The Central Bank of Nigeria has increased the interest rate by a cumulative 450 basis so far this year as a result of the rising rate of inflation in the country, which hit a new 7-year high of 21.09% in October 2022.
- The federal government also continue to visit the local debt market to raise funding to fund its budget deficit, amidst a crunch in revenue generation.
In case you missed it: Meanwhile, Nairametrics reported earlier in the week that Nigeria’s debt stock hit $151.3 billion as of June 2022, most of which is owed to the general public in form of FGN securities.
- According to the analysis, $50.51 billion is owed to investors, while $48.01 billion is owed to the CBN in form of Ways and Means.
