FGN bonds record 32% oversubscription in May auction
FGN Bonds Achieve 32.8% Oversubscription in May Auction
By Elizabeth Adegbesan
Investor demand for Federal Government of Nigeria (FGN) debt instruments remained robust in May, as the recent bond auction reported a 32.8% oversubscription.
The Debt Management Office (DMO) announced this development on Tuesday. Investors submitted bids totaling N797.17 billion, which includes a N280 billion non-competitive bid, for bonds amounting to N600 billion. The total allotments surged by 122%, reaching N614.51 billion in May, a significant increase from N276.8 billion in April.
The auction featured two bond instruments: the 22.6% FGN JAN 2035 (10-year reopening) and the 16.25% FGN APRIL 2037 (20-year reopening), with each offering N300 billion.
Interest was particularly high for the 20-year APRIL 2037 bond, which drew N533.94 billion in bids from 96 successful applicants. This bond received the majority of allotments, totaling N476.84 billion, while the JAN 2035 bond attracted N137.67 billion in bids.
The clearing yields for the bonds were set at 17% for the JAN 2035 bond and 17.04% for the APRIL 2037 bond. During the auction, the pricing ranges were indicated as follows: 15% – 22.6% for the JAN 2035 bond and 14% – 18.49% for the APRIL 2037 bond.
These results highlight a growing preference among investors for Nigerian government debt, even as allotments have tightened in comparison to previous months.
