DMO uses bonds to raise ₦64.06bn towards the 2018 budget implementation

Nigeria’s Debt Management Office (DMO) yesterday announced that it has raised the sum of ₦64.06bn towards the implementation of the 2018 national budget. The money was raised through the issuance of Federal Government Bonds.

Details about the bonds issuance

According to the circular released on the agency’s website, the bonds offerings are in three tenors of 5,7 and 10 years. This is intended to meet the different needs of various investor categories.

According to the circular, the March auction was oversubscribed, with a total sum of ₦142.81bn recorded. This represents a 204% increase in the amount offered.

The subscription rates for the 5, 7 and 10-year bonds were 189%, 84% and 329% respectively; indicating a clear preference for the 10-year bond.

Meanwhile, the sum of  ₦64.06 was allotted at the rates of 13.40%, 13.53% and 13.60% for the 5-year, 7-year and 10-year bonds respectively.

In a supporting statement that was issued to the media yesterday in Abuja, the Debt Management Office shared further insight on the development.

We conducted the third in the series of FGN Bond auctions for the year on March 21, 2018 to raise funds for the implementation of the 2018 budget. Bonds were offered in three tenors of five, seven and 10 years to meet the needs of the various investor categories. The auction was oversubscribed, just like the January and February auctions.

Total subscription at the March auction was ₦142.81bn, representing 204 per cent of the amount offered. The subscription rates for the five, seven and 10 year bonds were 189 per cent, 84 per cent and 329 per cent, respectively, showing the preference of investors for the 10-year bond.

Recall that the Federal Government of Nigeria in December proposed a budget of ₦8.612 trillion which is yet to be passed by the National Assembly.