Investors have oversubscribed the first auction of federal government Bond conducted by the Debt Management Office (DMO) in the year.

This indicates that the capital market still have strong appetite for the FGN Bond despite recent developments in the capital market.

 The oversubscribed bonds will mature in July 2021 and others in March 2027. The 14.50% FGN bond expected to mature in July 2021 was allotted at a rate of 13.3800%, while the 16.2884% FGN March 2027 bond was allotted at 13.4910%. Both bonds were oversubscribed, by N150 billion, representing 136%.

 Giving that the subscription level was higher for the 10-year benchmark bond, this indicates investors’ preference for longer dated instruments.

 The DMO which released its Issuance Calendar for Q1, 2018 recently gave details of its Auctions for the quarter by disclosing that it allotted a total of N110 billion, which was the amount offered in its circular released ahead of the Auction.

 As it had always stated, the DMO has “structured the auctions to provide long-term funds for the government for development purposes, without crowding out the private sector.”


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