In its February auction, the Federal Government of Nigeria garnered N1.5 trillion through bonds, a significant shortfall from its initial target of N2.5 trillion. The Debt Management Office (DMO) revealed this information in a press release on Tuesday.
Of the total amount raised, the 2031 bond received an allotment of N873.53 billion, while the 2034 bond stood at N621.38 billion.
Last week, the government had aimed to borrow N2.5 trillion through bonds, marking its second foray into the fixed-income market this year. The offerings comprised N1.25 trillion with a maturity date of February 2031 and another N1.25 trillion with a 10-year tenor.
Both newly issued bonds are priced at N1,000 per unit, with a minimum subscription requirement of N50,001,000 and subsequent increments in multiples of N1,000. Interest payments on these Federal Government of Nigeria (FGN) bonds are made semi-annually.
The DMO’s statement highlighted the unprecedented nature of the auction, where N1.495 trillion worth of FGN bonds were raised. Despite receiving total bids of N1.9 trillion, the DMO allotted N873.53 billion for the 2031 FGN bond and N621.38 billion for the 2034 FGN bond, resulting in a total allotment of N1.495 trillion.
The decision to offer a relatively large amount of bonds was influenced by the government’s financing needs, the opportunity to attract foreign investors, and the possibility that some local investors could access pools of funds.
In January, the DMO had offered four 10-year reopened bonds totaling N360 billion, from which the Federal Government raised approximately N418.197 billion.
