FG Raises N1.5tn in Two FGN Bond Offers

Nigeria's Debt Profile

The Federal Government successfully raised N1.5tn through bonds during its February auction, slightly lower than the N2.5tn target set for the offering.

According to a press release from the Debt Management Office (DMO) on Tuesday, the 2031 bond received a total allotment of N873.53bn, while the 2034 bond saw an allotment of N621.38bn.

Last week, the government announced its intention to raise N2.5tn through bonds, marking its second foray into the fixed-income market this year.

The offerings comprised N1.25tn with a maturity date of February 2031 and another N1.25tn with a 10-year tenor. These bonds, newly created, were offered at a unit price of N1,000, with a minimum subscription requirement of N50,001,000 and subsequent increments in multiples of N1,000. Interest payments on FGN bonds are made semi-annually (twice a year).

The DMO noted in its statement, “In an unprecedented development, the Debt Management Office raised N1.495tn Federal Government of Nigeria bonds at its monthly auction for February 2024.”

It continued, “The DMO offered a N1.25tn 7-year FGN bond maturing in 2031 and another N1.25tn 10-year FGN bond maturing in 2034. For the offer, the DMO received total bids of N1.9tn, making it the highest it has received in any one FGN Securities Auction.”

Explaining the rationale behind the relatively large offering, the statement highlighted the government’s financing needs, the opportunity to attract foreign investors, and the possibility for local investors to access pools of funds.

In January, the DMO conducted an auction for four 10-year reopened bonds, amounting to N360bn. The results indicated that approximately N418.197bn was raised from the auction of these four bonds.

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