FG Bonds Record 97% Oversubscription, Says DMO

Ndubuisi Francis in Abuja

The Debt Management Office (DMO) has revealed that the 10-year tenor bond issued in the just-concluded October auction recorded a 97 per cent oversubscription.

The DMO, in a bond summary disclosed that the five-year tenor bond posted six per cent subscription, adding that of the N50 billion offered for each bond, the five-year tenor bond recorded N3 billion subscription from six successful bids.

Although the 10-year tenor bond recorded N97 billion subscription from 67 successful bids, the 20-year tenor bond was not on offer.

Nigeria sold five and 10-year bonds at a flat rate of 15 per cent at an auction last Wednesday to curtail borrowing costs as inflation declines.

The DMO sold N3 billion of the 2021 paper and N97 billion of the 2027 paper at 15 per cent.
It allotted N21.13 billion of the 10-year debt on a non-competitive basis.
“In addition, N21.13 billion of the 16.2884 per cent FGN MAR 2027 was alloted on non-competitive basis,” the DMO said.

The DMO had in September offered a total of N150 billion for the five-year, 10-year and 20-year tenor bonds at N50 billion each.
The September auction results showed that the five-year bond recorded a subscription of N32.26 billion out of the N50 billion offered.

But the 10-year tenor bond posted a N76.93 billion subscription while the 20-year tenor bond recorded a subscription of N131.59 billion.
Similarly, in August, the bonds recorded a total subscription of N56.05 billion, indicating less than half of the N135 billion offered.

The DMO had in September, in collaboration with the Ministry of Finance and Ministry of Power, Works and Housing, launched a N100 billion Sukuk bond, the first of its kind in the country.

Proceeds of the oversubscribed Sukuk have already been handed over to the Ministry of Power, Works and Housing for the construction of 25 roads across the six geo-political zones of the country.