Nigeria: Govt Borrows N1.54 Trillion Through Bond Auctions in H1'20

2 July 2020

The Federal Government borrowed N1.54 trillion from domestic investors through bond auctions conducted by the Debt Management Office (DMO) in the first half of the year (H1'2020).

These include N1.37 trillion borrowed through the monthly FGN bond auctions from January to June; N2.27 billion borrowed through the monthly FGN Savings Bonds from January to March; and N162.55 billion borrowed through the Sukuk bond auction held in June.

Vanguard analysis of the bond auctions show that the FG borrowed 1.37 trillion through the monthly FGN bond auctions. The DMO conducted six FGN bond auctions of 5-years, 10years, 15 years, and 30-years tenors, offering N615 billion worth of bonds.

The offers were 299 percent oversubscribed as investors demanded for N2.5 trillion, representing total public subscription. Further analysis showed that the debt agency allotted N1.11 trillion on competitive basis while N1.37 trillion was allotted on non-competitive basis.

The FG also borrowed N162.55 billion through the Sukuk bond auction conducted by the DMO in June. Though DMO offered N150 billion worth of bonds, investors demanded for N669.12 billion as total subscription, representing 346 percent oversubscription.

The FG also borrowed N2.27 billion through the monthly FGN Savings bonds action conducted by the DMO in the first quarter of the year. While the FG borrowed N828.04 million through the 2-years savings bonds, it borrowed N1.45 billion through the 3-years savings bonds.

FGN Bond auctions

Furthermore, Vanguard analysis of the FGN bonds auctions showed that the FG borrowed N259.73 billion through the 5-years bonds. The DMO offered N190 billion bonds, but the offer was 137 percent oversubscribed as investors demanded for N449.49 billion bonds. The DMO allotted N194.73 billion on competitive basis while N65 billion was allotted on non-competitive basis.

The FG also raised N171.38 billion debt through the N95 billion worth of 10-year bonds offered by the DMO. The offer was 213 percent oversubscribed, as investors demanded N297.68 billion bonds, while the DMO allotted N136.39 billion on competitive basis and N35 billion on non-competitive basis.

Furthermore, the FG raised N221.2 billion through the 15-year bonds offered by the DMO. While the debt agency offered N105 billion worth of bonds, investors demanded for N287.68 billion worth of bonds, representing 174 percent oversubscribed. The DMO allotted N127.2 billion on competitive basis while N94 billion was allotted on non-competitive basis.

Additionally, the FG borrowed N605.76 billion through the 30-year FGN bonds offered by the DMO. While the debt agency offered N225 billion worth of bonds, investors demanded N1.25 trillion as total public subscription, representing, 455 percent oversubscription. The debt agency allotted N603.93 billion on competitive basis while N1.83 billion was allotted on non-competitive basis.

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