DMO Cuts Rates on Nigerian Bonds, Turns Down Excess Demand
The Debt Management Office (DMO) cut rates on Nigerian Government bonds at its monthly primary market auction on Monday.
The authority opened N260 billion worth of federal government bonds for investors’ subscription across two reopenings -5 and 7 years to maturity borrowing instruments.
Investors’ subscription was significantly above offer size, reflecting heightened appetite for the naira assets despite declining yields in the fixed income market.
While the DMO pushed out N260 billion, investors’ demand came in heavy at N1.271 trillion. The auction results revealed that the total allotment settled at N313.771 billion at a lower marginal rate.
Breakdown revealed that the Debt Office received a N212.662 billion subscription level for Nigerian bonds with 5 years maturity that was reopened versus N130 billion on offer.
Allotment for the 5-year bonds settled at N87.798 billion at the lower spot rate of 15.832% from 16% for Sept auction.
The Federal Government bonds with 7 years maturity that was opened attracted significant subscription that reflected investors’ appetite for long duration ahead of anticipated interest rate cut.
While the Debt Office opened N130 billion for 7-year reopened local bonds, investors’ subscription level came at N1.058 trillion. Total allotment for 7-year bonds settles at N225.973 billion at a lower spot rate of 15.85%, down from 16.20%. Interbank Rates Mixed as Excess Liquidity Expands to N3.8trn
