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Investors oversubscribe Nigeria’s 30-year bond by 400%

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On Wednesday, the Debt Management Office (DMO) issued the first 30-year FGN bond, offering N20 billion worth of the note to interested investors.

At the close of the auction Thursday, the debt office said it received subscriptions valued at N80.41 billion from investors, representing a 400 percent subscription rate.

According to details of results of the exercise, the paper was sold to investors at an interest rate of 14.80 percent, which would be paid semi-annually to holders.

Recall that during the bond auction on Wednesday, the DMO offered three maturities in 5-year, 10-year and 30-year and received total subscriptions of N149.30 billion, representing a total subscription level of about 150 percent.

A total of N40 billion worth of the 5-year bond, N40 billion worth of the 10-year bond and N20 billion worth of the 30-year bond were auctioned yesterday.

At the end of the sale, the debt office allotted a total of N97.40 billion to successful bidders at 14.50 percent for the 5-year, 14.55 percent for the 10-year and 14.80 percent for the 30-year FGN bond.

Director-General of DMO, Ms Patience Oniha, explained that, “The bulk of the subscriptions came from asset managers and insurance companies who have been looking for long-term, good quality assets to buy in order to match their liabilities.”

She said, “With the success of the 30-year bond offering, the DMO has reinforced its pioneering role in the domestic capital market by introducing another longer-dated instrument which for the government, represents appropriate funding for infrastructure and an effective tool for spreading out its liabilities, while for the private sector, it provides an avenue for other issuers, such as corporates, to access longer-term funding for their projects.”

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