DMO raises N535bn (US$1.74bn) for FG in months

The Debt Management Office (DMO) has raised a total of N535 billion for the Federal Government in the last 90 days.
This followed the successful March 2017 N130 billion bond auction, which recorded a success of 165 per cent over subscription rate, demonstrating the appetite of investors for earnings and fixed income investments.

While the N130 billon issued due to over subscription was raised to N160 billion last week Wednesday, reflecting that N375 billion was raised in January and February 2017.

Last week the Debt Management office (DMO) held its latest monthly ((March) auction of FGN bonds. The instrument, analysts expressed recorded huge success on subscription rate, as government runs debt auction programmes even as the national Assembly was yet to approved FGN budget for the year.

The FG offered N130bn, which attracted a total bid of N216bn and raised N160bn (US$520m)

The office successfully launched a new 10-year benchmark, and was able to set a marginal rate for the two re-opened issues up to 50bps lower than at the previous month’s auction. The bid, while short of February’s record N337bn, provided adequate coverage.

With the March bond auction, the DMO has now raised N535bn (US$1.74bn) in just three months The FGN’s 2017 budget proposals project a FGN deficit of N2.36trn and domestic borrowing of N1.25trn, Ostensibly, the local borrowings are to cover the budget deficit.

Daily Times recalls that, this year, the DMO’s domestic target spreads outside FGN bonds sold at monthly auction. The DMO is currently marketing savings bonds to retail investors with two- and three-year maturities.
The Securities ad Exchange Commission (SEC) in collaboration with the DMO and the Nigerian Stock Exchange (NSE) are working on the launch of the country’s first sukuk (Islamic bond).