The Federal government’s N90 billion bond auction for April netted total subscription of N262.48 billion, representing 292 per cent subscrip-tion rate, the Debt Management Office ( DMO) said yesterday. Three bonds – 5, 7 and 10 year were offered by debt office on behalf of the government for a total amount of N90.00 billion. Announcing the result in a statement, the DMO put the total subscription at N262.48 billion, a subscription rate of 292 percent.
“Each of the bonds was oversubscribed, with demand for the 10-year bond particularly strong at a rate of 534%”, said DMO. A total of N90.00 billion was allotted at 12.75 percent for the 5-year bond, 12.85 per cent for the 7-year bond and 12.89 per cent for the 10-year Bond. Interest rates at the Auction continued to trend downwards, as was the case at the March 2018 Auction, and the rates for all the bonds offered at the April Auction were below 13 percent.
“The drop in rates is consistent with the DMO’s expectations, based on its redemption of Nigerian Treasury Bills, which started in December 2017”, the debt office said. “The funds injected into the market through the redemptions, and the lower interest rates, are supposed to make credit available to private sector borrowers at lower rates. This should enable them to lower their cost of operations and be more competitive in pricing.”
Source: New Telegraph