Investors oversubscribe for March 2022 FGN bond by N448.42bn

Nigeria’s FGN bond issuance for March 2022 by the Debt Management Office (DMO) recorded an oversubscription of N448.42 billion over the intended N150 billion offered by the DMO.

This is according to the March 2022 FGN Bond auction result issued and released by the Management Office.

The bond issuance was auctioned in two tranches with a 12.5% FGN Jan 2026 bond programme seeking to raise N75 billion, which gathered a total subscription book of N231.02 billion across 97 bids, with a marginal rate of 10.1500%.

In the same vein, the second bond programme, the 13% FGN Jan 2042 bond raised a total subscription of N367.40 billion across 141 bids, representing an N157.32 billion oversubscription on the offered amount of N75 billion with a marginal rate of 12.700%.

Compared to the bond issued in the previous month, the marginal rate for 12.5% FGN Feb 2026 dropped from 10.95%. recorded in February 2022 to 10.15% in the review month.

The bonds were auctioned on 21st March 2022, with the settlement date set at 18th February 2022.

The tenors for the two bonds are 10-year and 20-year with maturity dates of 22nd January 2026 and 21st January 2042 respectively.

The 10-year bond recorded 97 successful bids out of the total 170 bids, while the second tranche recorded 227 successful bids out of the total 141 bids.

According to the March auction performance report, successful bids for the 12.50% FGN JAN 2026 & 13.00% FGN JAN 2042 were allotted at the Marginal Rates of 10.1500% and 12.7000%, respectively. However, the original coupon rates of 12.5000% for the 12.5000% FGN JAN 2026 and 13.0000% for the 13.0000% FGN JAN 2042 will be maintained.

Meanwhile, the amount allotted for the first tranche was N127 billion compared to the total subscription of N231.02 billion, while the second bond had an allotment of N169.37 billion as opposed to the N367.40 billion registered.

Despite the decline in interest rates, the instrument’s oversubscription indicates that Nigerian investors prefer less volatile investment products t,hat guarantee their capital returns, albeit at a low yield on investment.