March 28, 2019

FGN bonds record N140bn over-subscription

FGN bonds record N140bn  over-subscription

Abraham Nwankwo DG, Debt Management Office

By Emma Ujah, Abuja Bureau Chief

Investors’ appetite for the Federal Government Bonds has continued to rise with the March Auction, conducted yesterday, recording a N140 billion over-subscription.

Abraham Nwankwo
DG, Debt Management Office

At the exercise, which was conducted by the Debt Management Office, DMO, N100 billion bonds were offered, but investors staked over N240.6 billion.

The over-subscription of the FGN bonds at the monthly auctions had been consistent since the beginning of the 2019 fiscal year.

A statement by DMO, yesterday,  said it offered three instruments at the auction for three, seven and 10-year tenors and subscriptions for the three instruments were in excess of N148bn for competitive bids.

“Non-competitive bids valued at N92.6bn were also received, taking the total subscriptions across the 3 tenors to over N240.6bn,” it said.

Investors oversubscribe 2nd N100bn FGN Sukuk

The trend of investors’ preference for the longer tenured instrument continued, with the 10-year bond significantly oversubscribed with a bid-to-cover ratio above five.

Allotments were made to successful bidders at the rates of 13.5 per cent for the five-year, 13.5 per cent for the seven-year and 13.5percent for the 10-year bonds, which are considerably lower than the allotment rates for the February 2019 Auction.

The total amount allotted to both competitive and non-competitive bids for the three instruments, according to the DMO, was N121.95 billion.