FGN bonds issued to fund 2018 budget – DMO

The Debt Management Office (DMO) has said that the third in theseries of FGN Bond Auctions for the year was conducted to raise funds for the implementation of the 2018 Budget.
Bonds were offered in three tenors– five, seven and 10 years, to meet the needs of the various investor categories.
The Auction was oversubscribed, just like the January and February Auctions.
Total subscription at the March Auction according to the DMO was N142.81 billion, representing 204 per cent of the amount offered.
The subscription rates for the 5, 7 and 10 year .
Bonds were 189 per cent, 84 per cent and 329 per cent respectively, showing the preference of investors for the 10-year Bond.
The DMO in a statement said that based on the bids received, a total of N64.06 billion was allotted at the rates of13.40 per cent for the 5-year, 13.53 per cent for the 7-year and 13.60 per cent for the 10-year Bond.
Operators said that trading in the bond market was mixed, albeit with a bearish tilt, as average yield rose marginally one basis point week on week to close at 13.53 per cent.
Investors sold off at the short seven basis points and mid two basis points ends of the curve, with the FEB 2020 with 23 basis points and JAN 2026 seven basis points bonds recording signifi cant expansions.
Yields at the long has negative six basis points end contracted, led by the APR-2037 with negative of 14 basis points bond.
However, at the bond auction, the DMO allotted N10.05 billion of the JUL-2021 note re-opening, N8.91 billion of the MAR-2025 note new issue and N45.10 billion of the FEB2028 re-opening note at respective marginal rates of 13.40 per cent against 13.70 per cent traded previously, 13.53 per cent and 13.60 per cent against 13.98 per cent at previous auction.
Financial analysts from Cordros Capital Limited reiterated that their expectation for lower yields in the short to medium term, reflecting falling inflation rate, strengthening expectation of monetary easing, and the FGN’s new debt management strategy

 

Leave a Reply