Strong Investor Demand Pushes FG to Raise N1.22 Trillion in June Bond Auction

((DMO. Photo by Leadership News)

The federal government has raised N1.22 trillion from its June bond auction, following strong investor demand that exceeded the amount on offer.

The Debt Management Office disclosed on Monday, June 22, that the auction was significantly oversubscribed, reflecting sustained appetite for Federal Government of Nigeria securities despite prevailing market conditions.

The DMO had offered N600 billion each in two reopened instruments the 22.60 per cent FGN January 2035 bond and the 16.2499 per cent FGN April 2037 bond bringing the total offer size to N1.2 trillion.

Total subscriptions, however, reached N1.413 trillion, representing an oversubscription of approximately N213.49 billion.

For the 22.60 per cent FGN January 2035 bond, which carries a remaining tenor of eight years and seven months, the DMO received subscriptions worth N705.22 billion from 179 bids, of which 135 were successful, with a total allotment of N600.90 billion.

The bond cleared at a marginal rate of 18.34 per cent, with bids ranging between 16.00 per cent and 22.60 per cent.

The 16.2499 per cent FGN April 2037 bond attracted subscriptions of N708.27 billion from 215 bids, with 181 successful bids and a total allotment of N621 billion.

The marginal rate for that instrument settled at 18.35 per cent, with bids ranging between 16.00 per cent and 21.75 per cent.

Across both instruments, the DMO allotted a total of N1.2219 trillion, slightly above the initial offer size.

The agency confirmed that the original coupon rates of 22.60 per cent for the January 2035 bond and 16.2499 per cent for the April 2037 bond would be maintained.