Federal Government bond auction attracted strong investor interest, with total subscriptions rising to about ₦931.5 billion, well above the ₦750 billion on offer in March.
Data from the Debt Management Office (DMO) on Tuesday showed that the bulk of the demand came from the 9-year bond, highlighting strong investor demand for government securities.
The 9-year bond, which alone recorded ₦462.21 billion in subscriptions, accounted for almost half of the total amount raised at the auction.
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Similarly, the 5-year and 7-year bonds attracted ₦251.43 billion and ₦217.87 billion respectively.
Despite the strong demand across all tenors, the DMO allocated funds selectively.
It exceeded its offer on the 9-year bond, allotting ₦332.71 billion against the ₦300 billion initially planned.
However, it allotted far less than the subscriptions received for the shorter tenors, selling ₦88.80 billion for the 5-year bond and ₦63.99 billion for the 7-year bond.
Yields rose slightly with longer maturities, with the 5-year bond clearing at 16.00 per cent, the 7-year at 16.15 per cent, and the 9-year at 16.64 per cent.
The strong overall subscription, particularly for the longer-term bond, reflects investors’ preference to lock in higher returns, as well as confidence in government securities.
Pinnacle Daily had reported that DMO planned to raise N750 billion in the March bond offer, targeting large investors, with a minimum subscription of N50,001,000 and additional investments in multiples of N1,000.
According to the offer, successful bidders are to pay based on the yield-to-maturity that clears the auction, along with any accrued interest, while interest payments are to be made semiannually, with the principal repaid in a lump sum at maturity.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
