FG plans to raise N120 billion in December bond auction 

The auction, scheduled for December 16, 2024, will offer investors an opportunity to subscribe to reopened debt instruments, with settlement set for December 18, 2024.

This was the same amount offered in the previous month, which was one of the lowest amounts offered this year, as the Federal Government seemed to slow down on bond offerings.

Several features make these bonds attractive to investors. They qualify for tax exemptions under the Company Income Tax Act and the Personal Income Tax Act, making them particularly appealing to pension funds and other institutional investors. Listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, the bonds are tradable assets. They also qualify as liquid assets for liquidity ratio calculations for banks, enhancing their appeal to financial institutions.

Compared to October, the November auction saw a 33.33% reduction in the total amount offered.

The DMO placed N60 billion on offer for each bond, a drop from N90 billion in October. Despite the lower offerings, total allotments rose significantly, climbing by 19.50% to N346.155 billion from N289.597 billion in October.

For the 5-year Bond, N63.530 billion was allotted, while the 7-year Bond recorded an allotment of N282.625 billion. In contrast, the October auction allotted N57.237 billion and N232.360 billion for the 5-year and 7-Year Bonds, respectively.

Also, investor interest far exceeded expectations, with total bids amounting to N369.585 billion—a 208% subscription rate. This oversubscription highlights the market’s appetite for fixed-income instruments amid evolving macroeconomic conditions.