DMO Hikes Rates on 5, 7-Year Nigerian Bonds
The Debt Management Office (DMO) increased rates on Nigerian government bonds across reopened 5- and 7-year papers, amid softer subscription levels.
At the April bond auction, the DMO offered to sell a total of N700.0 billion in local bonds maturing in 2030, 2032, and 2035.
Total subscription printed at N948 billion as investors continue to seek higher returns on the naira assets following a surge in headline inflation.
Despite a relatively higher level of interest reflected in the number of bids submitted, the authority raised N276.8 billion at stop rates of 16.30%, 16.50% and 16.59%, respectively.
5-Year reopened bonds totalling N46.835 billion was allotted to investors at the rate of 16.30%, up from 16% in March with N181.945 billion subscription that chased N300 billion offer.
7-year reopened FGN bonds attracted N167.041 billion in subscriptions, versus the N100 billion offered, placed on the table at the auction. The DMO sold N18.718 billion worth of a 7-year reopened bond to investors at 16.50%, up from 16.15% in March.
Reopened FGN bond with 10-year maturity caught investors’ attention with N599.023 billion subscription money chasing N300 billion offer made by the authority.
The DMO allotted N211.238 billion worth of 10-year reopened bonds at a lower rate of 16.59% from 17.52% it had maintained since the January auction.
In the secondary market, trading activities were bearish. Traders reported selloffs in the mid-segment (+11bps) of the curve. Specifically, investors sold off the JAN-35 (+65bps) and Feb-34 (+31bps) papers. As a result, the average yield expanded slightly by 3bps to 16.07%.
