The Debt Management Office (DMO) has disclosed that the federal government seeks to borrow N450 billion from its third FGN bond auction of 2024, this month.
This figure is 82 per cent less than the N2.5 trillion target from the same bond auction in the previous month.
The auction is set for March 18, 2024, with a settlement date of March 20, 2024, and includes three different bonds: a new 3-year bond for March 2027, and re-openings of the 18.50% FGN February 2031 and the 19.00% FGN February 2034 bonds
Each bond has an allocation of N150 billion, totalling the government’s N450 billion borrowing target for this month.
According to the circular, investors will purchase these bonds at a price corresponding to the yield-to-maturity bid that clears the auction volume and any accrued interest.
These bonds, being crucial instruments for the government’s debt management strategy, serve multiple purposes, including providing investors with a relatively safe investment option, assisting in managing the country’s debt profile, and facilitating efficient fund management.
The DMO further stated that the units of sale will be at N1,000 per unit, with a minimum subscription of N50,001,000, and subsequent subscriptions in multiples of N1,000, while the interest on the bonds is payable semi-annually until maturity, where a bullet repayment is scheduled.
In 2023, the Federal Government raised about N5.49 trillion through FGN bond auctions which were used to finance the 2023 budget deficit of N11.34 trillion.
In January 2024, the Federal Government raised about N418.197 billion from the four bonds that were auctioned.
The Federal Government in February 2024 realised N1.49 trillion from the two FGN bond offer issued by the DMO below the target of N2.5 trillion.
