Nigeria’s maiden 30-yr bonds excite investors, receives 400% subscription
Investors keenly jostled for Nigeria’s first ever N20 billion 30-year FGN Bond offered by the Debt Management Office (DMO) earlier today to generate long term funds for infrastructure.
According to the DMO, a total subscription of N80.41 billion was received from investors for the N20 billion offered for the 30-year Bond, representing a 400% subscription rate.
The bulk of the subscriptions came from asset managers and insurance companies who have been looking for long-term, good quality assets to buy in order to match their liabilities.
“With the success of the 30-year Bond offering, the DMO has reinforced its pioneering role in the Domestic Capital Market by introducing another longer-dated instrument which for the Government, represents appropriate funding for infrastructure and an effective tool for spreading out its liabilities, while for the private sector, it provides an avenue for other issuers, such as corporates, to access longer-term funding for their projects,” the DMO said in a mailed statement.
DMO Director General, Patience Oniha had announced that the federal government will for the first time issue 30-year tenored bonds, given the relatively low interest rates compared with 2017 levels of over 18 percent.
She assured that the bonds issuance will meet the needs of annuity funds and other long term investors while also developing the domestic capital market and reducing the re-financing risk of the federal government.
“It will enable Government raise long-term capital for Infrastructure, serve as benchmark for Private sector raising of long-term investment capital, reduce short-term Debt, as well as help deepen the Life Insurance sector in particular,” Oniha had noted.
The DMO also, during the Wednesday auction offered a total of N100 billion in tenors of 5, 10 and 30 years at the Auction and received total subscriptions of N149.30 billion, representing a total subscription level of about 150%.
The debt office said it allotted a total of N97.40 billion to successful bidders at 14.50% for the 5-year, 14.55% for the 10-year and 14.80% for the 30-year FGN Bond.