The Debt Management Office (DMO) maintained tight spot rates at its latest Federal Government of Nigeria (FGN) bond auction, underscoring investor preference for longer-dated instruments and subdued interest in shorter-term offerings.
At the auction, the DMO offered ₦350 billion across two reopened bonds: ₦200 billion for the April 2029 issue and ₦150 billion for the February 2031 bond. Despite the offerings, total investor subscriptions—including non-competitive bids—reached ₦495.95 billion, indicating relatively lukewarm interest in local bonds compared to Treasury and OMO bills.
The DMO allotted a total of ₦397.9 billion to investors, with ₦123 billion coming from non-competitive bids. Successful bids for the 19.30% FGN APR 2029 and the 19.89% FGN MAY 2033 were cleared at marginal rates of 19.00% and 19.99%, respectively. The original coupon rates of 19.30% and 19.89% will be maintained on both instruments.
According to analysts at AAG Capital Limited, demand skewed heavily toward the long end, with the May 2033 bond oversubscribed by three times its offer. It cleared at 19.99%, aligning with market expectations.
In contrast, the April 2029 bond received tepid demand, attracting less than 25% of its offer size. It cleared at 19.00%, unchanged from the previous auction and just below analysts’ projected range.
AAG Capital noted that the auction outcome highlights the DMO’s cautious approach to managing borrowing costs, despite limited appetite for shorter-term bonds. The overall results reflect investors’ sustained preference for duration and the DMO’s measured stance on yield escalation.
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