The Federal Government, through the Debt Management Office (DMO), has raised over N346.155 billion at its November 2024 bond auction.
The auction was conducted by the DMO on November 18, 2024 and featured reopening of the 19.30% FGN APR 2029 (5-Year Bond) and the 18.50% FGN FEB 2031 (7-Year Bond).
The November auction saw a 33.33% reduction in the total amount offered, compared to the previous month.
The DMO placed N60 billion on offer for each bond, a drop from N90 billion in October. Despite the lower offerings, total allotments rose significantly, climbing by 19.50% to N346.155 billion from N289.597 billion in October.
For the 5-year Bond, N63.530 billion was allotted, while the 7-year Bond recorded an allotment of N282.625 billion. In contrast, the October auction allotted N57.237 billion and N232.360 billion for the 5-year and 7-Year Bonds, respectively.
The total amount offered at the auction was N120 billion, evenly split at N60 billion for each bond series.
However, investor interest far exceeded expectations, with total bids amounting to N369.585 billion—a 208% subscription rate. This oversubscription highlights the market’s appetite for fixed-income instruments amid evolving macroeconomic conditions.
Investor demand remained strong but moderated slightly, with total subscriptions in November reaching N369.585 billion, a 5.06% decline 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.
In the November 2024 bond auction, the Federal Government also incorporated a Non-Competitive Allotment, a feature typically designed to cater to retail investors and smaller-scale participants seeking fixed-income exposure without competing directly on marginal rates.
This allotment was applied exclusively to the 19.30% FGN APR 2029 (5-Year Bond), with an allocation of N0.500 billion.
The 18.50% FGN FEB 2031 (7-Year Bond), however, did not feature any non-competitive allotment.
Marginal rates increased in November, reflecting tightening liquidity conditions. The 5-year Bond’s marginal rate rose to 21.00% from 20.75% in October, while the 7-year Bond’s rate increased to 22.00% from 21.74%.
Bid ranges in November also highlighted robust investor competition, with the 5-Year Bond receiving bids between 19.00% and 21.90%, and the 7-Year Bond bids ranging from 18.00% to 23.00%.
