DMO Priced Down Rate on Nigerian Bond as Auction Underperforms
The Debt Management Office, DMO, priced down interest rate on Nigerian government re-opening local bonds at the primary market auction at the beginning of the week, according to results obtained by MarketForces Africa.
At the auction, the DMO offered N300 billion to investors across two maturities 5 and 9-year tenors. The DMO offered 19.30% FGN APR 2029 worth of N200 billion while N100 billion worth of 19.89% FGN MAY 2033 was offered.
Authorised market participants at the auction submitted bids worth N530.13 billion across the Apr-29 and Feb-33 maturities. According to DMO results, investors showed preference for long dated FGN bonds maturing in 2033. Investors demand for 9-year bonds accounted for about 89% of total subscriptions.
Subscription for 5-year bonds paper was 11% of total subscription received by the authority at the auction, details from the auction subscription results revealed.
Total bid to offer ratio printed at 1.77x, significantly lower than the 4.66x recorded in the previous auction. As a result, the DMO allotted N271.23 billion, 9% less than the initial offer, with the May-33 bond securing 98% of the total allotment.
Stop rate for Apr-29 declined to 19.00% from 19.20% at the last auction, while May-33 settled at 19.99%, TrustBanc Financial Group Limited told investors in a note. DMO said successful bids for the 19.30% FGN APR 2029 & 19.89% FGN MAY 2033 were allotted at the Marginal Rates of 19.00% and 19.99%, respectively.
For 19.30% FGN APR 2029, total subscription of N59.069 billion was received from investors while total subscription for 19.89% FGN MAY 2033 was N471.241 billion. The DMO sold 5-year bonds worth N4.686 billion, and raised N266.542 billion from 9-year bonds. #DMO Priced Down Rate on Nigerian Bond as Auction Underperforms UBA Grows Profit by 26% to N766.6 Billion in FY2024
