The federal government has raised N475.67 billion in its March bond auction.
The auction, conducted on March 18, 2024, by the Debt Management Office (DMO), attracted an overwhelming interest from investors, demonstrating their confidence in the nation’s economic stability and growth potential.
The amount raised in March is slightly higher than what was raised in January (about N418.197 billion) and far less than what was raised in February (N1.49 trillion).
The amount raised has been attributed to the current rally in rising rates
There has been a consistent increase in the rates offered from an average of about 15 per cent in January to about 20 per cent in March.
The auction featured three offerings: a new 3-year bond, alongside the reopening of 7-year and 10-year bonds, all of which witnessed remarkable demand, especially the 19.94 per cent FGN MAR 2027 3-Year Bond and the 19.00 per cent FGN FEB 2034 10-Year Bond.
The 3-year bond alone, offered at N150 billion, drew bids amounting to N264.628 billion, leading to an allotment of N151.928 billion at a marginal rate of 19.94 per cent. This signifies an impressive subscription rate, nearly 76 per cent above the offered amount, underscoring the investors’ bullish stance on Nigeria’s debt instruments.
Moreover, the 10-year bond, with the same offer amount of N150 billion, attracted bids worth N298.600 billion, culminating in an allotment of N275.850 billion at a marginal rate of 20.45 per cent. The nearly doubled subscription volume highlights a strong belief in the country’s long-term economic prospects and stability.
While the 7-year bond reopening was not as overwhelmingly subscribed as its counterparts, it still showed healthy demand. With bids totalling N51.786 billion against an offer of N150 billion, the DMO allocated N47.886 billion at a 20.00 per cent marginal rate.