The Federal Government raised over N346.155 billion in its November 2024 bond auction, with higher allotments despite offering a reduced amount.
The auction, held by the Debt Management Office (DMO) on November 18, 2024, included reopenings of the 19.3 per cent FGN APR 2029 (5-Year Bond) and the 18.50 per cent FGN FEB 2031 (7-Year Bond).
This marked a 33.33 per cent reduction in the total amount offered compared to October.
The DMO offered N60 billion for each bond, down from N90 billion in October.
Despite the reduced offerings, total allotments rose by 19.50%, reaching N346.155 billion compared to N289.597 billion in October.
The 5-year Bond received an allotment of N63.530 billion, while the 7-year Bond was allotted N282.625 billion.
In comparison, the October auction allotted N57.237 billion for the 5-year Bond and N232.360 billion for the 7-year Bond.
The total amount offered at the auction was N120 billion, split evenly at N60 billion for each bond series.
However, investor interest surpassed expectations, with total bids reaching N369.585 billion, reflecting a 208 per cent subscription rate.
This oversubscription underscores the strong market demand for fixed-income instruments amid changing macroeconomic conditions.
While investor demand remained robust, it slightly moderated, with November subscriptions totaling N369.585 billion, a 5.06 per cent decrease from October’s N389.321 billion.
The 5-Year Bond attracted N75.560 billion in subscriptions, up from N60.737 billion in October. Conversely, the 7-year Bond saw subscriptions drop to N294.025 billion from N328.584 billion.
It was observed that In the November 2024 bond auction, the Federal Government introduced a Non-Competitive Allotment, a feature typically aimed at retail investors and smaller-scale participants.
This allows them to gain fixed-income exposure without directly competing on marginal rates.
The Non-Competitive Allotment was applied solely to the 19.30 per cent FGN APR 2029 (5-Year Bond), with an allocation of N0.500 billion.
This modest allotment serves as a strategic inclusion, allowing broader market participation while keeping the primary focus on competitive bidding from institutional investors.
Non-competitive allotments offer smaller investors the opportunity to access government securities at the same marginal rate set during the auction, without the need to submit competitive bids.
