Nov Bonds Auction: DMO Allots N39.52 bn to Investors
At the FGN Bonds Auction, for November 2018 whose results has just been released, the Debt Management Office (DMO) sold N39.52 billion. Three Bonds in tenors of 5 years, 7 years and 10 years were offered at the Auction.
Allotments were made to the successful bidders at 15.20% for the 5-year, 15.50% for the 7-year and 15.83% for the 10-year Bond.
Although subscription levels were higher than the amount allotted, it was observed that the DMO was unwilling to accept higher rates from subscribers in order to moderate debt service cost and maintain market stability as the rates at which each of the Bonds were allotted were close to their Secondary market Yields.
Recall that the Federal Government of Nigeria bond auction for September conducted by the Debt Management Office (DMO), on Wednesday, September 26, 2018 was over-subscribed by over 158 billion.
This was the same scenario for the August 2018 auction.
According to the DMO, “Total subscriptions received from bidders for three bonds offered: five-year, seven-year and 10-year was in excess of N158.00 billion, against the N90 billion offered. “Demand at the Auction was concentrated on the 10-year bond which was 313% subscribed”, the agency said.
The DMO further revealed that allotments were made to successful bidders at 15.00% for the five-year, 15.15% for the seven-year and 15.2459% for the 10-year bond, which were consistent with the rates in the secondary market for the bonds offered at the auction.
It added that 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.