Nigeria 5-Year Bonds Interest Rate Rises by 14bps
Nigeria’s 5-year bonds were priced higher by 14 basis points (bps) at the primary market auction (PMA) conducted by the Debt Management Office (DMO) on Wednesday.
MarketForces Africa reported that Nigeria’s debt office reopened 5- and 7-year bonds worth N120 billion to market participants at its monthly bond auction sales.
Details revealed that N60 billion was offered for the April 2029 and February 2031 bonds at the auction. FGN bond auction results showed a 14 basis point increase in the stop rate for the April 2029 bond, which closed at 21.14%.
Meanwhile, the February 2031 bond’s rate remained unchanged at 22.00% amidst oversubscription, supported by a strong appetite for the naira assets.
A review of DMO results showed that total subscription reached N278.82 billion, surpassing the offered amount of N120bn by 132%. The 2029 and 2031 Federal Government Bond maturities were oversubscribed by about 12% and 252%, respectively, according to analysts.
This resulted in a bid-to-cover of 0.76x, lower than 0.93x recorded at the last auction in November. The Debt Office took advantage of higher demand for the local bonds and allotted N211.15 billion to market participants.
Further review showed that DMO allotment to investors comprises about 75% of 2031 FGN bonds. Stop rates came in higher for the 5-year bond maturity at 21.14% from 21%, while the 2031 maturity printed flat at 22%.
