September 2018 FGN Bond Auction Oversubscribed
The FGN Bond Auction for September 2018, which was conducted by the Debt Management Office (DMO) on Wednesday, September 26, 2018 was oversubscribed, as was the case for the August 2018 Auction. Total subscriptions received from bidders for three Bonds offered: 5-year, 7-year and 10-year was more than N158.00 billion, against the N90 billion offered. Demand at the Auction was concentrated on the 10-year bond which was 313% subscribed.
Allotments were made to successful bidders at 15.00% for the 5-year, 15.15% for the 7-year and 15.2459% for the 10-year Bond, which are consistent with the rates in the secondary market for the Bonds offered at the Auction.
A total of N96.74 billion was allotted to bidders at the Auction and the proceeds will provide additional financing for the implementation of the 2018 Appropriation Act.
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Economic Confidential recalls that the Federal Government of Nigeria (FGN) Bond Auction for August 2018, which was conducted by the Debt Management Office (DMO) on Wednesday, August 15, 2018, at which N90 billion Bonds were offered in three tenors – 5 years, 7 years and 10 years – was also oversubscribed.
A statement from the DMO said “the total subscriptions received from bidders at the Auction were above N100 billion.”
The statement added that “allotments were made to successful bidders at 14.39% for the 5-year, 14.60% for the 7-year and 14.69% for the 10-year Bond, which are consistent with the rates in the secondary market for the Bonds offered at the Auction.”
“A total of N100.09 billion was allotted to competitive and non-competitive bidders at the Auction and the proceeds will provide additional financing for the implementation of the2018 Appropriation Act” the statements read.
On Tuesday, the Director General of the DMO, Ms Patience Oniha had disclosed that to help fund the 2018 capital budget, the Debt Management Office (DMO) has borrowed N410 billion from the domestic market so far.
Patience Oniha said this amount is part of the N793 billion that will be borrowed from the domestic market this year.
According to Oniha, “the DMO has already started new borrowing by raising N410 billion for domestic borrowing in 2018.”
Though the DMO has not started external borrowings for the year, Oniha noted that the 2018 Appropriation Act authorized an external/foreign borrowing of N850 billion, the DMO she said “will try to get cheaper ones first.”
