DMO Release Result For FGN Bond Auction For January 2024

The Debt Management Office recently released the result for the FGN bond auction for January 2024.

From the recent results, the Federal Government raised about N418.197 billion from four auctioned bonds.

The auction of the bonds took place on January 29, 2024, as it saw the reopening of the 10-year 16.2884% FGN MAR 2027, the 10-year 14.55% FGN APR 2029, the 10-year 14.70% FGN JUN 2033, and the 15-year 15.45% FGN JUN 2038 bonds.

Details of the bond auction are as follows

• N90 billion was offered for the 16.2884% FGN MAR 2027 bond. A subscription of N166.997 billion, representing an oversubscription of N76.997 billion, was received, with bids ranging between 12.00% and 18.50%. However, only N86.187 billion was allotted, with the marginal rate being 15.00%.

• N90 billion was offered for the 14.55% FGN APR 2029 bond. A subscription of N56.839 billion was received, representing an under-subscription of N33.161 billion, with bids ranging between 12.50% and 18.00%. However, the allotted amount was N21.939 billion, with a marginal rate of 15.50%.

• N90 billion was offered for the 14.70% FGN JUN 2033 bond. A subscription of N68.846 billion was recorded, representing an under-subscription of N21.154 billion, with bids ranging between 13.50% and 17.97%. The allotted amount was N43.346 billion, with a marginal rate of 16.00%.

• N90 billion was offered for the 15.45% FGN JUN 2038 bond. A subscription of N311.875 billion was received, representing an oversubscription of N221.875 billion, with bids ranging from 15.7% and 18.5%. The total allotted amount was N266.725 billion, with the marginal rate being 16.50%.

Data Sourced from Nairametrics

The turnout of the selling of the bonds shows investors' appetite for long-term bonds in Nigeria due to the high ROI, even with the rising inflation that has disrupted some trading activities in the market.

With a drop in 2024's budget deficit to N9.18 trillion from 2023's budget deficit of N11.34 trillion, there is expected to be a drop in the amount raised through FGN bonds. For example, the report shows that the N418.197 billion allotted in FGN bonds in January 2024 is a 36.9% year-on-year decline from the N662.617 billion raised in January 2023.