Bonds: FG Rakes In N620bn In 6 Months
The Federal Government recorded a total of N619.63bn from debt securities issued in the first half of the year.
These debt securities include Federal Government bonds, savings bonds and green bonds.
Statistics obtained from the Debt Management Office on Wednesday showed that the highest amount of proceeds of N601.89bn was recorded from FGN bonds.
In January, the DMO offered N150bn worth of bonds, consisting of the re-opening APR2023 N50bn bond at 12.75 per cent, the re-opening MAR2025 N50bn bond at 13.53 per cent and the re-opening FEB2028 bond at 13.98 per cent.
The DMO said a total subscription of N197.09bn was received on the total N150bn bond offer while only N116.99bn was allotted.
In February, the DMO reopened the APR2023 bond, offering only N40bn for subscription at 12.75 per cent.
The MAR2025 and FEB2028 bonds were also reopened for subscription as the DMO offered N40bn on the MAR2025 bond and N20bn on the FEB2028 bond at 13.53 per cent and 13.98 per cent, respectively.
The DMO recorded a total subscription of N234.25bn on the February bond auction but only allotted N150bn.
In March, the APR2023, MAR2025 and FEB2028 bonds were reopened, offering N40bn, N40bn and N20bn, respectively, for subscription.
The N20bn offer was oversubscribed while the two others were undersubscribed. In all, the government recorded a subscription of N148.47bn. a total of N29.35bn was allotted from the offers.
This was due to the fact that the MAR2025 and FEB2028 bonds were fully subscribed and exhausted.
In April, the DMO reopened the APR2023, offering the same amount of N40bn at 12.75 per cent.
The DMO also issued fresh bonds in April, offering a 10-year N40bn and a 30-year N20bn bond.
Investors oversubscribed to the bonds by N49.3bn while the DMO allotted only N97.4bn from the total subscription of N149.3bn received.
The APR2023, APR2029 and APR2049 bonds were reopened in May at 12.75 per cent, 14.55 per cent and 14.80 per cent, respectively.
A total subscription of N271.11bn was received on the bonds while the DMO allotted N111.31bn.
In June, the APR2023, APR2029 and APR2049 bonds were re-opened, maintaining same interest rates of 12.75 per cent, 14.55 per cent and 14.80 per cent, respectively.
Of the total N160.13bn subscriptions received, the DMO allotted N96.84bn.
No Eurobonds was issued by the Federal Government in the first half of the year.
No treasury bill was issued in the first half of the year. However, In July, the DMO auctioned N223.22bn worth of treasury bills while it received N374.13bn and allotted N223.22bn.
In August, another N34.38 worth of treasury bills were auctioned. The DMO received N146.53bn and allotted N34.38bn.
The proceeds from the treasury bills, therefore, did not constitute part of the total analysis since they were outside the first half of the year.
The DMO issued the Federal Government’s only green bond for the first half of the year in June.
The N15bn worth of green bond has a seven-year tenor and a coupon band of 14.40 per cent to 14.50 per cent.
The offer for subscription of the N15bn green bond was by way of book build.
The Federal Government gave a breakdown of the use of the proceeds of the N15bn green bond to include N1.22bn to the Federal Ministry of Environment; N600m to the Federal Ministry of Agriculture and Rural Development; and N8.26bn to the Federal Ministry of Power, Works and Housing.
Others uses included N500m to the Federal Ministry of Transport; N1.59bn to the Federal Capital Territory Authority and N2.82bn to the Federal Ministry of Water Resources.
The Federal Government recorded N2.74bn revenue from savings bonds in the first half of the year.
In the first quarter of the year, the DMO recorded N1.02bn investment from savings bond and N1.72bn investment in the second half of the year.
The Head, Market Development, DMO, Mr Monday Usiade, while speaking at the Retail Bond Workshop at the Nigerian Stock Exchange recently, stated that more work needed to be done to attract more investors to patronise savings bond.
Usiade, who was represented by Mrs Bose Olafisoye, said that majority of the investors in savings bond were from the South-West.
Giving further details about the geographical distribution of investors, Usiade said the Federal Capital Territory and the South-South produced eight per cent each.
The South-East and international community produced four per cent of the investors while the North-West and the North-Central produced three per cent each.
Usiade added that the North-East recorded zero subscriptions, while Lagos, FCT, Oyo and Ogun contributed a little above 70 per cent of the total investment.
He said, “Eleven distribution agents have not remitted any amount to the DMO from inception. Such DAs that are yet to submit subscriptions in all the auctions as well as other DAs with marginal returns may be de-registered at the end of the year.
“Given the analysis of the performance of the DAs, there is need for them to improve on their performance in order to meet stated objectives.”
Usiade added that though modest progress had been made, the FGN savings bond was far from achieving its stated objectives.
The Director-General, DMO, Ms Patience Oniha, said the DMO had invested a lot of money in attracting retail investors into the market.
She said that the FGN savings bond was introduced to promote a national savings culture, diversify investment base for FGN securities and provide investment opportunities to all citizens, irrespective of income level to participate in the fixed income securities market.