The Federal government of Nigeria says it has raised N289.597 billion from its October bond auction. The auction, held on October 21 2024, opened with the19.30% FGN APR 2029 (5-year bond) and the 18.50% FGN FEB 2031 (7-year bond).
The auction attracted huge number of interest from investors despite the soaring inflation in the country. The government had previously offered N180 billion with N90 billion allocated to each bond. The amount was lower than the N190 billion offered in September.
Despite the low amount, the bond saw a surge in allotment up to N289.597 billion, an indication of a growing investor’s confidence in government securities.
The 5 year bond attracted subscription of N60.737 billion while the 7 year bond attracted N389.321 billion subscription. Also, the 5-year bond was allocated at 20.75% marginal rate up from 19% in September, indicating a 9.2% increase.
Similarly, the 7 year bond saw a marginal rate increase of 8.8% from 19.99% in September to 21.74% in October. This reflects the government’s ability to secure funds amid rising demand for its instruments.
In addition, this high level of subscription indicates a growing appetite for long term investment with higher profit margin especially with the constant interest rate hike by the Central bank of Nigeria. The rate hike comes against the backdrop of mounting inflationary pressure and investors’ demand for higher returns on their investment.
