The Federal Government’s bond auction in February saw a surge in investor demand, with total subscriptions jumping to N1.63tn from N670.94bn in January.
This increase led to higher allotments despite falling yields, reflecting growing confidence in Nigeria’s debt market.
The Debt Management Office announced the results on its website on Tuesday.
The DMO conducted the auction on February 24, reopening the 19.30% FGN APR 2029 (five-year bond) and the 18.50% FGN FEB 2031 (seven-year bond).
Unlike January’s auction, which included a 10-year bond, the February auction featured only these two instruments.
The total offer for both bonds was N350bn, with N200bn for the five-year bond and N150bn for the seven-year bond.
However, strong demand pushed the total allotment to N910.39bn, exceeding both the initial offer and January’s allotment.
In January, the government offered N450bn across three bond tenors—five-year, seven-year, and ten-year—but raised the allotment to N601.04bn due to high investor demand.
The allotment for January included N78.86bn for the five-year bond, N153.87bn for the seven-year bond, and N368.31bn for the ten-year bond.
Despite a lower offer of N350bn, the February auction saw a total allotment 51.5% higher than January’s.
The five-year bond’s allotment jumped to N305.36bn, nearly four times its January level, while the seven-year bond surged to N605.03bn, almost quadrupling the previous month’s figure.
The absence of the ten-year bond in February likely drove investors to redirect funds into shorter-tenor instruments, boosting subscriptions.
Despite the larger allotments, yields fell sharply. In January, the five-year bond had a marginal rate of 21.79%, while the seven-year bond stood at 22.50%.
By February, the five-year and seven-year bond rates fell to 19.20% and 19.33%, respectively, dropping over 250 basis points.
This decline suggests investors are accepting lower returns, possibly due to expectations of a stable interest rate environment and moderating inflation.
