The Federal Government’s main market bond auction sales to investors in the local debt capital market brought in more than N368 billion for Nigeria’s Debt Management Office.
The agency pushed higher as investors developed a combination of sentiment in front of the May 29 handover and growing inflation rate, in contrast to an original offer of instruments valued at N360 billion when the subscription was launched.
For the maturities of February 2028, April 2032, and January 2042, the subscription levels were modest. However, the oversubscription for the Mar-2050 bond papers was staggering (3.8x). Investors were informed by TrustBanc Capital that the stop yield on the Mar-50 maturity remained at 15.8%, while the stop yields on the Feb 2028 and Apr-32 maturities increased by 10bps to 14.1% and 14.9%, respectively.
The Jan-2042 offer, meanwhile, had a higher allocation of 15.69%, up 29 basis points. The FGN Bond market started on Monday with little activity as local dealers at the secondary market turned their focus to the auction as anticipated.
At the Primary Market Auction, market participants, asset managers, pension fund managers, and other authorized dealers submitted their bids. As a result, dealers informed investors that the value of standard FGN bonds was basically unchanged for the majority of maturities. While inflation accelerated, the secondary market’s average yield stayed the same at 14.00%.
The yields on the FGN Bonds for 10 years, 15 years, 20 years, and 30 years were constant at 12.72%, 14.96%, 15.23%, and 15.83%, respectively. As the naira declined further, the Eurobond segment opened on a mixed note, with bids at the near end of the benchmark curve submerging offers at the mid and long ends. The average secondary market yield contracted to 13.15%.
