Nigeria’s DMO experienced high demand for local bonds in its recent auction, offering N350 billion but receiving over N1.632 trillion in bids. Only a portion of the requested funds were allocated, confirming strong investor interest despite limitations. The coupon rates for the bonds remained the same.
Nigeria’s Debt Management Office (DMO) recently faced excess demand for Federal Government of Nigeria (FGN) bonds during its monthly auction. The DMO offered a total of N350 billion in local bonds, aiming to raise N200 billion from 5-year bonds and N150 billion from 7-year bonds, following the cancellation of N100 billion in 10-year bonds.
At this auction, investors submitted total bids exceeding N1.632 trillion, indicating strong interest in naira-denominated assets. Specifically, the 5-Year FGN bonds attracted N465.146 billion in subscriptions, of which DMO allotted N305.362 billion, effectively catering to 97 out of the 133 bids received.
For the 7-Year bonds, the DMO had aimed to raise N150 billion, yet investor interest surged, resulting in total subscriptions of N1.167 trillion. Ultimately, only N605.027 billion was sold, fulfilling 175 out of 318 bids forwarded.
Successful bids for the FGN APR 2029 (5-Year Bond) and FGN FEB 2031 (7-Year Bond) were allocated at marginal rates of 19.20% and 19.33%, respectively. The DMO confirmed that the original coupon rates of 19.30% and 18.50% for these bonds would remain unchanged.
The recent auction conducted by Nigeria’s DMO highlighted the robust demand for local bonds, with total bids amounting to over N1.632 trillion. Despite this high interest, the DMO could only allot a fraction of the bonds offered. The prevailing coupon rates were retained, reflecting the ongoing appeal of naira assets in the market.
Original Source: dmarketforces.com
