Nigeria’s latest bond auction superintendend by the Debt Management Office (DMO) suffered low demand.
The DMO held its monthly auction of FGN bonds on Monday, and offered N225 billion but raised N123.9billion (USD 288.7 million)
The bonds were auctioned through re-openings of the 2025, 2032 and 2042 FGN bonds.
This is the first time in years that Nigeria’s bonds are performing sub-optimally. Demand for the bonds was considerably lower, as the DMO secured a total bid of N142.3billion (USD331.6m).
The bids for the 3, 10 and 20-year benchmarks were allotted at the marginal rates of 11.0 per cent (previously; 10.1 per cent), 13.0 per cent (previously; 12.5 per cent) and 13.7 per cent (previously; 13.2 per cent) respectively.
The DMO has a domestic funding target of N3.53trillion to finance the projected deficit of N7.35trillion in the FGN’s 2022 budget.
Giving reasons for the low demand for the bonds, a source at the DMO told The Nation that the “investors particularly banks and other large institutional investors such as pension funds and asset managers were waiting for the outcome of the MPC which started on that same Monday”.
The source also warned that “with MPR now at 14 percent, all major rates may go up”.
Professor Uche Uwaleke of Nasarawa State University speaking on the