By Melvin Onwubuke
The Federal Government through bond offering, was able to raise N1.5 trillion instead of the anticipated N2.5 trillion it targeted in its February auction.
According to The Punch, the Debt Management Office office in a press conference said that the 2031 bond had a total allotment of N873.53 while that of the 2034 bond stood at N621.31 billion.
These are both newly created bonds and offered at a unit price of N1,000, with a minimum subscription requirement of N50,001,000 and ensuing increments in multiples of N1,000. The payments of interests on FGN bonds are made twice a year.
In the statement, Debt Management Office said “In an unprecedented development, the Debt Management Office raised N1.495tn Federal Government of Nigeria bonds at its monthly auction for February 2024.
“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.”
“The relatively large amount on offer was based on the FGN’s financing need, the opportunity to attract foreign investors, as well as, the premise that some local investors may be able to access pools of funds” it added.
It highlighted that, at the close of the auction, N873.53bn was allotted for the 2031 FGN bond and N621.38bn for the 2034 FGN bond, making a total allotment of N1.495tn.
Recall last week, the federal government tried to obtain a N2.5 trillion through bonds for the second time this year in the fixed income market.
The offerings consisted of N1.25tn with a maturity date of February 2031 and N1.25tn with a 10-year duration.
