Investors Undersubscribe FG’s August Bonds

The Federal Government’s N145bn August bonds, which was offered on Wednesday were undersubcribed by N49.91bn

The Debt Management Office showed the breakdown of the auctioned bonds include a N40bn five-year reopening bond that would mature in April 2023 and be offered at 12.75 per cent; N50bn 10-year reopening bond that would mature in April 2029 and be auctioned at 14.55 per cent; and N55bn 30-year bond expected to mature in April 2049 and be auctioned at 14.8 per cent

Total subscription received from investors for the bonds was N92.09bn, comprising N10.41bn for 12.75 per cent FGN April 2023 bond; N37.47bn for 14.55 per cent FGN April 2029 bond; and N47.21bn for 14.80 per cent FGN April 2049 bond.

The DMO stated, “At the August 2019 FGN Bond Auction held on Wednesday, August 21, 2019, the Debt Management Office issued N59.53bn FGN bonds for the three tenors offered to various investors who subscribed at the auction.

“The DMO offered N40bn for the five-year, N50bn for the 10-year and N55bn for the 30-year bond.

‘Total subscriptions received from both competitive and non-competitive bids amounted to N139.58bn.

“Demand for the 30-year bond remained strong as has been the trend since the instrument was introduced to the market in April 2019. The total subscription for the bond at the auction was N64.71bn.

“The strong demand from investors for the FGN bonds offered at the auction was in spite of the prevailing tight liquidity experienced in the financial markets.

“Allotments were made to successful bidders at the rate of 14.290 per cent for the five-year, 14.390 per cent for the 10-year and 14.590 per cent for the 30-year bond.”