FG’s bond auction flops on the back of investor retreat

The Federal Government’s bond auction carried out by the Debt Management Office (DMO) Wednesday fell short of expectations as investors avoided the offers over yield drop.

Only N56.05bn ($179m), less than half the amount on offer in the bond auction was sold, as domestic pension funds and insurance firms cut orders due to low yields.

The DMO had offered N135bn worth of bonds maturing in 2021, 2027 and 2037, but investors snubbed the auction in preference for the relatively liquid secondary market.

Read also: Ecobank rakes in N389b in six months

The DMO offered to pay 16.80 per cent for the 2021 and 2027 bonds and 16.90 per cent for the 2037 debt options.

Investors had however demanded yields as high as 17 per cent, auction results showed, to help boost returns further above inflation, which was 16.1 per cent in June.

 

RipplesNigeria… without borders, without fears

Click here to join the Ripples Nigeria WhatsApp group for latest updates.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now