Nigeria’s Debt Office Sells 9-Year Bonds at 19.99%
The Debt Management Office (DMO) kept spot rates on the Federal Government of Nigeria (FGN) bonds tight at an auction that reflected weak investors’ interest in shorter duration.
At the auction, the DMO offered a total of N350 billion across two reopened instruments: N200 billion for the APR 2029 bond and N150 billion for the FEB 2031 bond.
Apart from non-competitive allotment, investors’ total subscription settled at N495.95 billion, reflecting relatively weak demand for Nigerian local bonds compared with treasury bills and OMO bills papers.
The DMO allotted Nigerian reopened bonds worth N397.9 billion to investors. Total allotment for non-competitive bids amounted to N123 billion priced at marginal rates.
In its auction results, the authority said successful bids for the 19.30% FGN APR 2029 and 19.89% FGN MAY 2033 bonds were allotted at the marginal rates of 19.00% and 19.99%, respectively. However, DMO said the original coupon rates of 19.30% for the 19.30% FGN APR 2029 & 19.89% for the 19.89% FGN MAY 2033 will be maintained.
In its commentary note, AAG Capital Limited noted that demand remained heavily skewed towards the long end, with the FGN May 2033 bond oversubscribed by 3 times and cleared at 19.99%, right within analysts’ projection.
FGN Bond 2029 bond saw tepid investor interest , attracted less than a quarter of its offer size, and cleared at 19%, unchanged from the previous auction and slightly below the investment firm’s expected range.
Fixed income market analysts at AAG Capital Limited said the outcome underscores the DMO’s continued preference to reduce borrowing costs even amidst weak demand for short tenors.
Overall, the auction reflected investors’ sustained appetite for duration and DMO’s Cautious stance on yield escalation. #Nigeria’s Debt Office Sells 9-Year Bonds at 19.99% $17bn: Nigeria Positions as World Bank’s Largest Portfolio in Africa
