FG Set To Auction Long Term Bonds At 14 %

As part of capital raising for the 2019 Budget, the Debt Management Office (DMO) is offering five, 10 and 30 year bonds at 12.8 percent (%) ,14.6 % and 14.8 % interest rates respectively. This was contained in a document published on the Debt Management Office (DMO) website yesterday.

The document showed the breakdown of the N145 billion bond to include a N40bn five-year reopening bond that would mature in April 2023, a N50bn 10-year reopening bond that would mature in April 2029 and N55bn 30-year bond expected to mature in April 2049. The document also showed that the auction date is September 25, 2019 and the settlement date is September 27, 2019.

The Federal Government also offered long term bonds of five-year, 10-year and 30-year tenors with a total value of N145bn, for subscription to the investors at its August and July FGN bond auction. The DMO in a statement noted that a total of 298 competitive bids were received in the month of July from investors for the three instruments, with a total value of N301.02bn. The statement also noted that the total subscription level was 207.6 per cent.

Allotments were made on successful bids at 13.35 per cent for the five-year, 13.64 per cent for the 10-year and 14.12 per cent for the 30-year bonds, which were consistent with secondary market yields and represented a decline in the marginal rates compared with those at the June 2019 FGN bond auction.
The DMO also offered a two and three year savings bonds for the month of August at 10.3% and 11.3% interest rates respectively. The interest payment of the bond is payable quarterly, and the bond costs N1,000 per unit, subject to a minimum subscription of N5,000 and in multiples of N1,000 subject to a maximum subscription of N50,000,000.