The Federal Government of Nigeria raised N626.813 billion in its April 2024 FGN bond auction, according to the Debt Management Office (DMO).
Compared to the N475.67 billion that was raised in the sale last month, this figure is around 32% greater. The substantial amount of cash raised came from the sale of long-term securities, which were split up among three different bond series with different maturities.
The April 15, 2024, auction demonstrated strong investor interest, especially in the 10-year bond. A significant total subscription of N550.828 billion was drawn to this instrument alone, demonstrating strong market trust in the government’s credit.
Dissection of bond offerings
The arrangements of the offerings were as follows:
- The 5-year bond (19.300% FGN APR 2029) with an initial offer of N150 billion had a total subscription of N239.542 billion, with N79.915 billion allotted.
- A seven-year bond (18.50% FGN FEB 2031), which was initially sold for N150 billion, garnered N129.718 billion in subscriptions, leading to an allocation of N85.050 billion.
- The 10-year bond (19.00% FGN FEB 2034) received the highest interest, with the government providing N150 billion and receiving bids totaling N550.828 billion. N461.848 billion was eventually allotted.
The range of offers received, which ranged from as low as 14.00% to as high as 24.00%, demonstrated the competitive yield environment and reflected different market expectations and risk appetites.
In the end, the five-year bonds were allotted at 19.30%, the seven-year bonds at 19.75%, and the ten-year bonds at 20.00% marginal rates.
These rates represent a little rise above those from earlier auctions, in line with the government’s plan to control borrowing costs while meeting the significant fiscal needs.
