FG Raises N724.9bn Bond Auction in February – DMO

The Debt Management Office says it has raised N724.9 billion Federal Government bond auction in February 2023, stating that it was a 100% increase compared to the previous year.

The auction, which was held on February 13, 2023, saw a total of 577 bids worth N724.9 billion received for the total amount offered of N360 billion.

The total amount allotted was N771.56 billion, with successful bids allotted at marginal rates of 13.99%, 14.90%, 15.90%, and 16.00%.

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The original coupon rates for each bond will be maintained, with successful bids for the 13.98% FGN FEB 2028 (10-Year Bond), 12.50% FGN APR 2032 (10-Year Bond), 16.2499% FGN APR 2037 (20-Year Bond), and 14.80% FGN APR 2049 (30-Year Bond) being allotted at the marginal rates of 13.99%, 14.90%, 15.90%, and 16.00%, respectively.

The settlement date for the auction was February 15, 2023, and the bonds will mature on February 23, 2028, April 27, 2032, April 18, 2037, and April 26, 2049, respectively.

According to a statement on the DMO’s website, it said the auction was part of its efforts to raise funds for the implementation of the Federal Government’s 2023 budget and to finance critical infrastructure projects across the country.

“The DMO has been actively promoting the issuance of FGN bonds as a means of diversifying the country’s funding sources and reducing its dependence on short-term borrowing. The FGN bond market has grown significantly in recent years, with a wide range of maturities and attractive yields for investors.

“Overall, the results of the February 2023 FGN bond auction highlight the continued strong demand for FGN bonds and the government’s commitment to meeting its funding needs through the capital markets.”

But, In recent years, Nigeria’s rising debt profile has been a topic of concern, with some experts warning that the country’s debt levels are unsustainable.

Earlier in January, the DMO warned that Nigeria’s public debt could reach N77 trillion if its “ways and means” were securitized.

Additionally, DMO, had announced plans to raise up to N1.2 trillion through FGN bonds in the first quarter of the year 2023.