The Debt Management Office (DMO) has announced the results of the bond auctions for March 2023, indicating that the nation raised a total of N563.26 billion through four re-opening bonds that it initially sought to raise N360 billion.
The federal government’s aggressive borrowings from the local market manifested in the over N200 billion by which the recent successful bond auctions were more than the initial target.
Recall that the federal government offered for subscription through the DMO four re-opening bonds comprising the re-opening 10-Year bond with 13.98% FGN FEB 2028; re-opening 10-Year bond with 12.50% FGN APR 2032; re-opening 20-year bond 16.2499% FGN APR 2037, and the re-opening, 30-year bond 14.80% FGN APR 2049.
The initial document showed that the FG sought to raise a total of N90 billion through each of the four bonds, bringing their cumulative value to N360 billion.
“Successful bids for the 13.98% FGN FEB 2028 (Re-opening, 10-Year Bond); 12.50% FGN APR 2032 (Re-opening, 10-Year Bond), 16.2499% FGN APR 2037 (Re[1]opening, 20-Year Bond) & 14.80% FGN APR 2049 (Re-opening, 30-Year Bond) were allotted at the Marginal Rates of 14.0000%, 14.7500%, 15.2000% and 15.7500%, respectively.
“However, the original coupon rates of 13.98% for the 13.98% FGN FEB 2028, 12.5000% for the 12.5000% FGN APR 2032, 16.2499% for the 16.2499% FGN APR 2037 and 14.80% for the 14.80% FGN APR 2049 will be maintained,” DMO said in a statement.
According to the auction results, DMO offered N90 billion for subscription on the 13.98% FGN Feb 2028 bond, with term to maturity of three years and 11 months. It received total bids of 52 out of which 48 were successful. Subscription on this instrument was to the tune of N72.751 billion, out of which the DMO allotted N70.751 billion, representing 97.4 percent of the total amount offered for subscription by investors. It has a marginal rate of 14 percent.
For the bond having its maturity date as March 2032, while N90 billion was offered by the DMO, subscription by investors amounted to N30.859 billion out of which N21.759 billion was allotted. A total of thirty-three bids were received for this instrument out of which twenty-three were successful. Its marginal rate is 14.75 percent.
DMO allotted N144.243 billion out of N355.633 billion offered for subscription for the bond maturing in April 2037. It is a 20-year bond that received 209 bids out of which 182 were successful. It has a marginal rate of 15.20 percent.
The April 2049 bond received 205 bids out of which 89 were successful. Subscription on it was to the tune of N349.369 billion, out of which the DMO allotted N326.509 billion to investors. The bond has a marginal rate of 15.75 percent.
FG’s appetite for debt has increased in recent times due to the huge fiscal deficit the country runs. The incessant borrowings have been decried as having the potential to crowd out small investors out of the domestic debt market.
