The Debt Management Office (DMO) has disclosed that the Federal Government raised N289.597 billion from its October 2024 bond auction.
The auction which held on October 21, featured two re-opened tranches of existing bonds: the 19.30% FGN APR 2029 (5-year bond) and the 18.50% FGN FEB 2031 (7-year bond) and attracted robust investor interest, resulting in a higher allotment.
The government initially offered N180 billion in the October auction, with N90 billion allocated to each bond, an amount slightly lower than the N190 billion offered in September, which was distributed across three bonds—the 5-year, 7-year, and 9-year tenors.
Despite offering a lower amount, the total allotment for October surged to N289.597 billion, highlighting heightened investor demand for government securities.
The 5-year bond (APR 2029) attracted N60.737 billion in subscriptions, while the 7-year bond (FEB 2031) saw a significant jump in bids, totalling N328.584 billion.
There was a sharp increase in investor engagement, rising to N389.321 billion in October from the N293.097 billion subscription recorded in September.
The high level of participation reflects investors’ sustained appetite for longer-dated instruments, which offer better returns in a rising interest rate environment.
Out of the total bids received, N57.237 billion was allotted from the 5-year bond, while N232.360 billion was allocated from the 7-year bond.
The total allotment for October (N289.597 billion) represents a 9.5% increase from the N264.527 billion raised in September.
The October auction also witnessed a notable increase in marginal rates, reflecting investors’ expectations for higher yields amid inflation concerns and tighter monetary policies.
The 5-year bond was allotted at a 20.75% marginal rate, up from 19.00% in September, representing a 9.2% increase.
Similarly, the 7-year bond saw its marginal rate rise to 21.74% from 19.99% in the previous month, an 8.8% increase.
