FG Bond Subscription Drops By 25%

 FG Bond Subscription Drops By 25%

In the month of October 2021, the Federal Government bond subscription dropped by 25 percent from N334.32bn in September to N250.71bn.

According to the Debt Management Office, the Federal Government’s bonds worth N150bn for October, which were auctioned on October 20, with a settlement date of October 22, were oversubscribed by N100.71bn.

The total subscription received from investors for the bonds was N250.71bn, comprising N49.05bn for 12.50 percent FGN January 2026 bonds, N80.92bn for 16.2499 per cent FGN April 2037 bonds, and N120.74bn for 12.98 per cent FGN March 2050 bonds.

The auction result showed that out of 44, 96 and 79 total bids for the tenures, 36, 61 and 54 were successful. A total of N192.76bn was allotted, comprising N44.80bn, N52.72bn and N 95.24bn respectively.

“Successful bids for the 12.50 per cent FGN January 2026, 16.2499 per cent FGN April 2037 & 12.9800 per cent FGN March 2050 were allotted at the Marginal Rates of 11.6500 per cent, 12.9500 per cent and 13.2000 per cent, respectively.

“However, the original coupon rates of 12.5000 per cent for the 12.5000 per cent FGN January 2026, 16.2499 per cent for the 16.2499 per cent FGN April 2037 and 12.9800 per cent for the 12.9800 per cent FGN March 2050 will be maintained”, DMO said.

September analysis

The debt office had earlier disclosed that the Federal Government’s bonds worth N150bn for September were oversubscribed by N184.32bn.

The total subscription received in September from investors for the bonds was N334.32bn, comprising N52.43bn for 13.98 per cent FGN February 2028 bonds, N125.58bn for 12.40 per cent FGN March 2036 bonds, and N156.31bn for 12.98 per cent FGN March 2050 bonds.

This shows that the bond subscription dropped by 83.61bn from September to October.

Recall that Nigeria spent $3bn in four years on servicing commercial loans, which include Eurobonds and Diaspora bonds.

Also commercial loans obtained by Nigeria through Eurobonds rose from $1.50bn as of December 31, 2015 to $10.87bn at the end of last years, indicating a $9.37bn or 625 per cent increase in five years.

Kehinde Ogunyale

Freelance Investigative and Data Journalist

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