FG  Raises N475.67bn in March Bond Auction 

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The Debt Management Office (DMO) said it raised N475.67 billion from the March 2024 Federal Government (FGN) Bond offer, slightly more than the N450 billion which it had planned to raise.

The auction, conducted on March 18, 2024, attracted an overwhelming interest from investors, demonstrating their confidence in the nation’s economic stability and growth potential and investors preference for longer tenured bond. 

The amount raised in March is slightly higher than what was raised in January, about N418.197 billion and far less than what was raised in February, N1.49 trillion. The Debt office had targeted  to raise N2.5 trillion in February.

The DMO had planned to raise N150 billion through a new 3-year FGN MAR 2027 bond and N150 billion each from the re-issuance of the 18.50 percent FGN FEB 2031 7-year paper and 19.00 percent FGN FEB 2034 10-year paper.

According to the auction results, of the N298.6 billion subscription on the 19.00 percent FGN FEB 2034 10-year paper, the DMO had allotted N275.85 billion asides a non competitive allotment of N113.2 billion at a stop rate of 20.45 percent with bids ranging from 17.5 to 25 percent.

It had also raised N151.928 billion from the new issue of 3-year FGN MAR 2027 bond at a stop rate of 19.94 percent with bids ranging from 17 percent to 25 percent. Also it raised N47.886 billion from the 18.50 percent FGN FEB 2031 7-year paper at a stop rate of 20 percent.

 

In February, the debt office had raised two new bonds hoping to raise N1.25 trillion each from FGN FEB 2031 7-Year and FGN FEB 2034 10-Year bonds. It could however only raise around half of its intended sale of N2.5 trillion in seven and 10-year bonds as the low interest rates on offer curbed investor appetite.

 

The two bonds were subscribed to the tune of N1.49 trillion with the seven-year tenor bond raking in N873.5 billion, 69.6 percent of the amount offered while the 10-year bond got N621.38 billion, 49.6 percent of the total offer.

 

The rates on the bond offers are however less than the 22.75 percent benchmark interest rate and 29.9 percent inflation rate in the country at the time.

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