The Federal Government of Nigeria (FGN) bond issuance for the month of January 2021 has been oversubscribed N139 billion. This is according to the Debt Management Office (DMO).
The oversubscription was disclosed in the January 2022 FGN bond auction result cited by BizWatch Nigeria.
In the auction result, it was stated there-in that the oversubscription pushed the total purchased bonds at N214.1 billion despite the fact that the DMO was only seeking to raise N75 billion in its 20-year bond issuance programme.
The Debt Management Office issued two tranches of bonds in its first issuance for the year, reopening its 12.5 FGN 10-year bond and issuing a new 13% FGN 20-year bond, which is set to mature by 2042.
Breakdown of the results
The breakdown of the report reveals that the first tranche was oversubscribed by N36.19 billion with subscriptions of N111.19 billion surpassing the offered amount of N75 billion, while the second tranche was oversubscribed by N139 billion over the N75 billion offered amount.
Last week, DMO bond issuance calendar for Q1 2022, puts the first auction date on 19th January 2022, with the rest coming up on 16th February and 23rd March 2022 respectively.
According to the report on the January auction performance, successful bids for the 12.50% FGN JAN 2026 & 13.00% FGN JAN 2042 were allotted at the Marginal Rates of 11.50% 11.00% – 14.50% 13.0000% and 13.00%, respectively.
However, the original coupon rates of 12.5000% for the 12.5000% FGN JAN 2026 will be maintained, while the coupon rate for the 13.00% FGN JAN 2042 (New Issue) is set at 13.00%.
This development, however, signifies that the investing public is still much excited about making financial commitment as investments to less risky instruments even though the returns are low.
