By JKNewsMedia Business
INVESTORS PUSHED down borrowing costs for the Federal Government at Monday’s bond auction, where the Debt Management Office (DBO) allotted N805.16 billion across three Federal Government of Nigeria (FGN) bond maturities amid bids totalling N1.73 trillion.
JKNewsMedia.com reports that the auction covered reopened 22.60 per cent January 2035, 16.25 per cent April 2037 and 15.45 per cent June 2038 bonds, with the DMO putting a combined N1.10 trillion on offer.
The January 2035 bond recorded the sharpest fall in its stop rate, dropping by 119 basis points to 17.15 per cent from 18.34 per cent at the previous auction. Its bids reached N513.61 billion against the N250 billion offered, while the DMO allotted N64.13 billion.
The stop rate for the April 2037 bond also declined, falling 116 basis points from 18.35 per cent to 17.19 per cent.
Investors also submitted N392.48 billion in bids for the instrument against an offer of N100 billion, with N110 billion allotted.
Demand was strongest for the June 2038 bond, which attracted ₦821.32 billion in bids against ₦750 billion offered as the DMO noted that it allotted N631.02 billion, while its stop rate declined by 61 basis points from 18.40 per cent to 17.79 per cent.
Across the three instruments, bids amounted to 1.6 times the total amount offered, while the ₦805.16 billion allotted translated to a bid-to-cover ratio of 2.2 times.
The results showed continued investor demand for longer-dated government securities as the Federal Government raised funds at lower stop rates across all three maturities.
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