FGN Bond attracts over-subscription of ₦66.7 billion

The ₦60 billion Federal Government Bond put on offer yesterday by the Debt Management Office (DMO) was over-subscribed to the tune of ₦6.7 billion, with a total subscription of ₦66.7 billion.

The over-subscription was a demonstration of a strong appetite for the federal government bonds by investors.

June 2018 Bonds which were auctioned yesterday were in three tenors – 5 years, 7 years and 10 years.

This is in spite of the FX Sale of $210 million by the CBN on Thursday, which mopped up over N65 billion from the market.

In addition, the CBN also mopped up over ₦200 billion from the system through the sale of OMO Bills on Monday.

The FX sale and the OMO Auction tightened market liquidity and pushed up interest rates.

To moderate Debt Service Costs, the DMO adopted a conservative approach by allotting only ₦31.2 billion at rates between 13.50% and 13.81%.

This is consistent with the federal government policy of sustained reduction in rates of its bonds at the capital market.

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