The Federal Government of Nigeria will be carrying out a bond auction today (Monday) through the Debt Management Office.
AMBusiness reported that the DMO Federal Government of Nigeria Bonds valued at N360 billion for subscription through auction.
DMO said the first offer is a February 2028 FGN Bond valued at N90 billion (10-year re-opening), at an interest rate of 13.98 per cent per annum.
According to the debt manager, the second offer is the April 2032 FGN Bond valued at N90 billion (15-year re-opening), at an interest rate of 12.50 per cent per annum.
In addition, there is also the April 2037 FGN Bond valued at N90 billion (20-year re-opening), at the rate 16.2499 per cent per annum.
The fourth offer is the April 2049 FGN Bond valued at N90 billion which is 30 year opening with an interest rate of 14.80 per cent per annum.
Nigerian Tribune reported on Monday that the Central Bank of Nigeria will also sell Treasury bills worth N161.87 billion in an auction during the week.
The bills will be sold in three different tenors: 91-day bills worth N1.10 billion, 182-day bills worth N0.92 billion, and 364-day bills worth N159.85 billion.
Experts predict that interest rates will stay similar across different time periods.
This prediction is based on there being a lot of money available in the financial system, which is being increased by payments from bonds that are due soon.
As a result, investors are likely to want to invest more money.
However, Meristem fixed income market analysts said, “we do not rule out a marginal uptick in the rates of long-dated instruments owing to investors’ expectation of a Monetary Policy Rate hike at the Monetary Policy Committee meeting.
“The sentiment in the secondary market has increased negligibly since the previous primary market auction, as the average bond yield increased to 13.07 percent as of March 16 (1bps higher than the last auction date).
“In the near term, we expect the sentiment to persist as investors continue to trade sideways.”
During the most recent auction in February 2023, many people wanted to buy the financial products being sold.
Even though there was slightly less interest in a certain product compared to the previous month, the overall amount of money that people wanted to invest was significantly higher than in the previous auction.
In fact, the total amount invested was 23.34% higher than in the previous month’s auction.
During the auction, more people wanted to buy financial products due to the money available in the financial system.
The total amount of money invested was 9.51% higher than in the previous auction.
However, the interest rates for certain products increased slightly, while one decreased slightly. Overall, the total demand was 29% higher than the amount available for purchase.
The firm stated in a note to clients, “We analysed the issues on offer given the current yield environment, market liquidity, as well as a review of the recent past auctions, whilst also introducing market sentiment factor into our valuation, on which we advise bid yield ranges for both issues on offer.”
