FG to auction N145bn bonds August 21

The Debt Management Office has said the Federal Government will auction N145bn worth of bonds by subscription on August 21.

A circular by the DMO on Wednesday showed the breakdown of the figure to include a N40bn five-year reopening bond that would mature in April 2023 and be offered at 12.75 per cent; N50bn 10-year reopening bond that would mature in April 2029 and be auctioned at 14.55 per cent; and N55bn 30-year bond expected to mature in April 2049 and be auctioned t 14.8 per cent.

According to the DMO, the auction date is August 21, while the settlement date is August 23.

It would be recalled that the DMO offered three instruments (five-year, 10-year and 30-year tenors) with a total value of  N145bn, for subscription to the investing public at its July FGN bond auction.

A total of 298 competitive bids were received from investors for the three instruments, with a total value of N301.02bn, indicating a subscription level of 207.6 per cent.

Allotments were made on successful bids at 13.35 per cent for the five-year, 13.64 per cent for the 10-year and 14.12 per cent for the 30-year bonds, which were consistent with secondary market yields and represented a decline in the marginal rates compared with those at the June 2019 FGN bond auction.

The total amount allotted for competitive bids is N86.82bn from the total subscription of N301.02bn. In addition, the sum of N58.20bn was allotted across the three tenors for non-nompetitive bids at the same rates with the competitive bids.

Overall, the sum of N145.02bn was raised at the auction through competitive and non-competitive bids. The amount raised is to be utilised to part-finance the 2019 budget of the Federal Government.

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