The Debt Management Office (DMO) has disclosed that Federal Government of Nigeria raised N626.813 billion in its April 2024 FGN bond auction.
This amount is about 32% higher than the N475.67 billion raised in the previous month’s auction. The significant capital inflow was garnered through the sale of long-term securities, divided across three distinct bond series with varying maturities.
The auction, which took place on April 15, 2024, showcased robust investor interest, particularly for the 10-year bond. This instrument alone attracted a substantial total subscription of N550.828 billion, indicating high market confidence in the government’s credit.
Breakdown of bond offers
The offerings were structured as follows:
- A 5-year bond (19.300% FGN APR 2029) with an initial amount offered of N150 billion saw a total subscription of N239.542 billion, from which N79.915 billion was allocated.
- A 7-year bond (18.50% FGN FEB 2031), also with N150 billion initially offered, attracted N129.718 billion in subscriptions, resulting in an allocation of N85.050 billion.
- The 10-year bond (19.00% FGN FEB 2034) saw the most substantial interest, with the government offering N150 billion and receiving bids totaling N550.828 billion, from which N461.848 billion was finally allotted.
The competitive yield environment was evident in the range of bids received, spanning from as low as 14.00% to as high as 24.00%, reflecting diverse market expectations and appetite for risk.
The bonds were eventually allotted at marginal rates of 19.30% for the five-year, 19.75% for the seven-year, and 20.00% for the 10-year bonds.
These rates signal a modest increase compared to previous auctions, aligning with the government’s strategy to manage its cost of borrowing while addressing the substantial fiscal demands.
