FG lures investors as DMO sells $1bn bonds

Nigeria raised 1.5 trillion naira ($996 million) in a bond auction as the yield offered by the government helped lure investors.

The Debt Management Office received a record 1.9 trillion naira of bids for the two securities on sale, the agency said in a statement on Tuesday.

The West African nation sold the debt to yield as much as 19%.

While the first offer is a seven-year bond valued at N1.25 trillion and expected to mature in February 2031, the second offer is a 10-year bond also valued at N1.25 trillion and expected to mature in February 2034.

The N2.5 trillion bond offers is part of the new domestic borrowing of N6 trillion in the 2024 Appropriation Act.

Providing updates on the bonds on Tuesday, the debt office said it received total bids of N1.9 trillion — the highest received in any of the FGN securities auctions.

“At the close of the auction, a total of N873.53 billion was allotted for the 2031 FGN bond and N621.38 billion was allotted for the 2034 FGN bond, making a total allotment of N1.495 trillion,” DMO said.

“The relatively large amount on offer was based on the FGN’s financing need, the opportunity to attract foreign investors, as well as, the premise that some local investors may be able to access pools of funds.”

The FGN bonds and other government securities like the savings bond and the Sukuk bond constitute the local component of government borrowing, the DMO said.