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FEBRUARY 2020 FGN BOND AUCTION OVERSUBSCRIBED
The February 2020 FGN Bond Auction by Debt Management Office (DMO) which took place on Wednesday, February 19, 2020, was significantly oversubscribed.
The DMO offered
N140.00 Billion across three (3) Instruments to investors at the Auction (5-Year tenor: N45.00 billion 10-Year tenor: N45.00 and 30-Year tenor: N50.00 billion). Subscriptions received through Competitive Bids for the three instruments was N398.20 billion, indicating a total subscription level of 284.43%. While Non-Competitive bid for the sum of N60 billion was also received, making the total subscriptions from Competitive and Non-competitive bid to the sum of N458.20 billion.
A breakdown of the Competitive subscriptions shows that the sum of
N78.43 billion or 174.30% was received for the 5-year Bond; the sum N95.70 billion or 212.67% for the 10-year Bond and the sum of N224.07 billion or 223.15% for the 30-year Bond.
Successful bids were allotted at the rate of 8.7500% for the 5-Year, 10.7000% for the 10-Year and 12.15% for the 30-Year Bond, which indicate a decline from the allotment rates of 9.8500%, 11.1250% and 12.5600% for the 5-Year, 10-Year and 30-Year Bonds, respectively, at the January 2020 FGN Bond Auction.
The total amount allotted for Competitive Bids was
N100.00 billion across the three (3) tenors, while a total sum of N60.00 Billion was allotted through Non-Competitive Bid for the 5-year and 10-year tenors, at same rates with the Competitive Bids, which made the total allotment from Competitive and Non-Competitive bids to N160.00 billion.
February 19, 2020
February 18, 2020
Nigeria: Planned External Capital Raising of USD3.30 Billion
In furtherance of the Government’s commitment to develop infrastructure, the proceeds of the USD2.786 billion will be used to finance Capital Projects in priority sectors of the economy that are included in the 2020 Appropriation Act. The projects include those in power, transport, works and housing, aviation, health, education, agriculture and rural development.
Mindful of the need to moderate Debt Service Cost, the plan for the raising of the USD2.780 billion capital is to first maximize financing from relatively cheaper concessional and semi-concessional external sources where available, and the balance, if any, from the International Capital Market (ICM) through the Issuance of Eurobonds.
In addition to the USD2.780 billion for the Budget, Nigeria has a USD500 million Eurobond which will mature on January 28, 2021 (6.75% USD500 million 2021). Given that the Eurobond will mature early in the year 2021, the plan is to refinance it through the issuance of a Eurobond in 2020. Thus, the new external capital raising for the year 2020 to part finance the 2020 Budget Deficit and refinance the Eurobond maturing in January 2021 is USD3.3 billion.
Whilst the approval process for the proposed USD3.3 billion external capital raising is expected to be completed soon, Transaction Advisers for a potential Eurobond Issuance will be through Open Competitive Bidding process.
February 13, 2020
The January 2020 FGN Bond Auction by Debt Management Office (DMO) which took place on Wednesday, January 22, 2020 was oversubscribed by more than 300%.
The DMO offered N155.00 Billion of three (3) Instruments (5-Year, 10-Year and 30-Year Tenors) to investors at the Auction.
Subscriptions received through Competitive Bids for the three instruments at the Auction was N624.498 Billion, while the sum of N1.83 billion was received through Non-Competitive bid making the total subscription received the sum of N626.328 billion.
Investor appetite for the 30-Year Bond continued to be strong, with subscription of N341.77 Billion or 621% compared to the amount offered of N55.00 Billion, while subscription for the 10-year Bond was N201.98 Billion or 404% when compared with the amount offered of N50.00 billion.
The Debt Management Office, on January 15, 2020, held an Interactive Session with Stakeholders on Public Debt to present its Issuance programme for 2020 and also get investors inputs and feedback into the DMO’s activities.
Participants included Primary Dealer Market Makers, Insurance Companies, Fund Managers, PFAs, Banks, Issuing Houses and Government Agencies.