Huge investor appetite for FG’s new five-year bond, oversubscribed by 60%

Investors have shown a healthy appetite for the new five-year tenor bond introduced by the federal government through the Debt Management Office (DMO).

According to the bond auction results released by the agency on Wednesday, the bond was oversubscribed by 60.9 percent.

The DMO offered N30 billion for the five-year tenor bond at 12.75 percent and the N38.29 billion was eventually allotted.

A total of N90 billion was realized from the auction consisting of N12.75 billion in seven-year bonds at 13.53 percent and N38.96 billion 10-year bond at 13.98 percent.

NAN reports that successful bids for the 12.75 percent April 2023, 13.53 percent for March 2025 and 13.98 percent for February 2028 were allotted at 12.75 percent, 12.85 percent and 12.89 percent, respectively.

“However, the original coupon rates of 13.53 percent for the 13.53 percent March 2025 and 13.98 percent for the 13.98 percent Feb. 2028 will be maintained, while the coupon rate for the 12.75 percent for April 2023 (new issue) is set at 12.75 percent,” the result read.

It added that N25 billion of the 13.53 percent March 2025 and N25 billion of the 13.98 percent Feb. 2028 was allotted on non- competitive basis.

NAN reports that Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.