The Federal Government secured over N346.155 billion at its November 2024 bond auction, despite offering 33.33% less than October’s amount. Conducted by the Debt Management Office (DMO) on November 18, the auction featured reopenings of the 19.30% FGN APR 2029 (5-Year Bond) and 18.50% FGN FEB 2031 (7-Year Bond).
Higher Allotments Despite Reduced Offerings
The DMO offered N60 billion per bond series, down from N90 billion in October. Total allotments, however, rose by 19.50%, reaching N346.155 billion compared to October’s N289.597 billion. The 5-year bond secured N63.530 billion, while the 7-year bond recorded N282.625 billion.
Strong Investor Interest
The auction attracted bids worth N369.585 billion, reflecting a 208% subscription rate. Subscriptions for the 5-year bond increased to N75.560 billion, while the 7-year bond saw a slight decline to N294.025 billion.
Non-Competitive Allotment
A N500 million non-competitive allotment for the 5-year bond catered to retail investors, offering fixed-income access without competitive bidding.
Rising Marginal Rates
Marginal rates increased to 21.00% for the 5-year bond and 22.00% for the 7-year bond, indicating tightening liquidity and inflationary pressures.
Key Insights
The auction’s results underscore strong investor confidence in government securities but highlight rising borrowing costs that may impact fiscal dynamics. The government’s strategic approach aims to balance funding needs with market stability.