The Debt Management Office (DMO) has announced the results of the July 2023 FGN bond auction, showing an oversubscription of 162.54 per cent.
The auction featured the re-opening of four bonds: the 14.55% FGN APR 2029 (10-Year Bond), 14.70% FGN JUN 2033 (10-Year Bond), 15.45% FGN JUN 2038 (15-Year Bond), and 15.70% FGN JUN 2053 (30-Year Bond).
The released result shows that the auction, which was held on July 17th, 2023, saw a total of 570 bids worth N945.14 billion received for the total amount offered of N360 billion. The total amount allotted was N656.74 billion, with successful bids allotted at marginal rates of 12.50 per cent, 13.60 per cent, 14.10 per cent, and 14.30 percent respectively across the four bonds.
The settlement date for the auction was July 19th, 2023, and the bonds will mature on April 26, 2029, June 21st, 2033, June 21st, 2038, and June 21st, 2053, respectively.
The oversubscription of 162.54 is indicative of a growing demand for risk-free investments, despite offering a negative real return as the inflation rate rose to 22.79 per cent in June 2023, and a growing interest in longer-term debt with higher yields.
The highest subscription of N600.686 billion went to the 30-year bond. Loop
The 30-year bond is the longest tenor on offer and has a relatively high yield, which is attractive to investors seeking to invest their money for a longer period and earn higher returns on their investments.
