Nigeria's FGN Bonds Oversubscribed by 45%, Attracting N1.74 Trillion

The Federal Government of Nigeria (FGN) bond auction held in July saw robust investor demand, attracting total subscriptions of N1.74 trillion against the N1.2 trillion offered by the Debt Management Office (DMO). This represents a 45 percent oversubscription, or N540 billion.

Despite the strong appetite for FGN debt instruments, total allotments for the month declined by 23.8 percent to N929.32 billion, compared to N1.22 trillion allotted in June. The auction offered three instruments: the 22.6 percent FGN JAN 2035, the 16.25 percent FGN APRIL 2037, and the 15.45 percent FGN JUN 2038 bonds, with N400 billion offered for each.

Investor interest was particularly high for the April 2037 bond, which received N665.19 billion in bids from 122 applicants. This instrument also received the largest portion of allotments, totaling N381.46 billion. The Jan 2035 bond attracted N245.73 billion in subscriptions, while the June 2038 bond received N302.13 billion.

Clearing yields for the bonds were 18.34 percent for Jan 2035, 18.35 percent for April 2037, and 18.40 percent for June 2038. The auction results indicate a continued growing appetite among investors for Nigerian government debt, even with tighter allotments compared to previous months.