Nigeria raises N374.751bn from August bond auction – DMO 

The Nigerian Government raised N374.751 billion in its August 2024 FGN bond auction.

The recent auction result released by the Debt Management Office (DMO) on its website showed that the total amount allotted in August 2024 was 66.05 per cent higher than the N225.714 billion recorded in the previous month.

Total subscription went up by 64.57 per cent to N460.182 billion but there was a 36.67 per cent decline in total bond offer to N190 billion for the August auction.

The bond auction which held on August 19, 2024, attracted more investors, indicating a renewed demand for government debt instruments.

An analysis of the auction showed that the 5-year bond, offering a coupon rate of 19.30 per cent was not attractive to investors, as it recorded   a subscription level of only N24.349 billion, significantly below the offered amount of N70 billion. 

As a result, N18.349 billion was allotted at a marginal rate of 20.30 per cent. The bond that was undersubscribed by 65.22 per cent suggests that investors are less interested in shorter-tenor bonds, likely due to their lower yield and shorter duration.

The 7-year bond on the other hand, saw moderate interest from investors, with a subscription of N60.750 billion, against N70 billion placed offered.

The DMO allotted N42.189 billion at a marginal rate of 20.90 per cent and a coupon rate of 18.50 per cent as it was undersubscribed by 13.21 per cent.

 The 9-year bond attracted interest of the investors with a subscription of N375.083 billion, despite the lower offered amount of N50 billion. 

The bond was allotted N314.213 billion at a marginal rate of 21.50 per cent, reflecting a significant oversubscription of 650.17 per cent. This bond’s appeal lies in its longer tenor and higher yield, which appear to align with investors’ strategies to secure higher returns in a potentially volatile economic environment.