Uche Usim, Abuja
Investors showed high demand for the May 2019 FGN bond auction held on Wednesday.
The Debt Management Office (DMO) offered three instruments for five, 10 and 30-year tenors to the investing public, with a total amount offered of N100 billion.
As with the April Auction when the 30-year bond was first offered to the market, investors showed a stronger demand for the 30-year bond with subscription of over N100 billion compared to the N30 billion offered.
According to DMO Director-General, Patience Oniha, “this clearly indicates that the DMO understands the needs and preferences of investors in terms of tenor, which informed its introduction of the 30-year Bond.
“The five and 10-year instruments were equally oversubscribed, with subscription of N45.98 billion and N124.22 billion respectively, compared to the N35 billion offered for each of the instruments.
“In addition to the strong demand, interest rates demanded by investors also significantly declined for all the instruments compared to the April 2019 auction”, she explained.
Oniha added that allotments were made to successful Bidders at 14.11 per cent for the five-year, 14.24 per cent for the 10-year and 14.49 per cent for the 30-year Bond. The DMO allotted a total of N111.31 billion for the three instruments offered.