The Debt Management Office (DMO) on Tuesday announced the results of the August 2023 FGN bond auction, which featured the re-opening of four bonds, namely the 14.55% FGN APR 2029 (10-Year Bond), 14.70% FGN JUN 2033 (10-Year Bond), 15.45% FGN JUN 2038 (15-Year Bond), and 15.70% FGN JUN 2053 (30-Year Bond).
more funds based on additional needs or was previously undersubscribed at the first issuance.
The auction, which was held on Monday, 14th August, grossed a total of 281 bids worth N312 billion from the total amount offered of N360 billion.
According to the results of the bond auction posted on the debt management agency’s website, the total amount allotted was N277.76 billion, with successful bids allotted at marginal rates of 13.85%, 15.00%, 15.20% and 15.85% respectively across the four bonds.
The settlement date for the auction is 16th August, 2023, and the bonds will mature on April 26, 2029, June 21st, 2033, June 21st, 2038, and June 21st, 2053 respectively.
Data from the August 2023 FGN Bond indicated that offer was undersubscribed by-13%, which showed lower demand by investors for risk-free investments as they continue to weigh in on the impact of rising inflation.
A further analysis of the data from the DMO revealed that the highest subscription of N244.231 billion (more than double the offer) committed to the 30-year bond indicated that investors were interested in longer-term debt with higher yields.
Analysts believe that when compared to the July auction which was oversubscribed by more than 1000% on 30-year bond, the August subscriptions showed that investors are weighing in the impact of rising inflation on their investments
Even then, the allotment of N244.231 billion to the 30-year bond is still good for the debt instrument with 15.85% returns.
The 30-year bond is the longest tenor on offer by the FGN with a relatively high yield and is attractive to investors seeking to invest for a long period for the purpose of earning higher returns on their investments.
