The Federal Government of Nigeria secured N211.144 billion from its December 2024 bond auction, a significant decrease compared to the N346.155 billion raised in November. The auction, conducted by the Debt Management Office (DMO) on December 16, 2024, reopened two existing bonds: the 19.30% FGN APR 2029 (5-Year Bond) and the 18.50% FGN FEB 2031 (7-Year Bond).
The auction recorded a total subscription of N278.82 billion, reflecting a sharp decline of 24.56% compared to November’s N369.585 billion.
For the 5-year Bond, subscriptions dropped to N67.457 billion from N75.560 billion in November, a decrease of N8.103 billion (10.73%). For the 7-year Bond, subscriptions fell significantly to N211.363 billion from N294.025 billion, a reduction of N82.662 billion (28.12%).
Allotments also decreased markedly, with N211.144 billion raised in December, down by N135.011 billion (39.00%) from the previous month. The 5-year bond allotment declined to N51.857 billion from N63.530 billion, while the 7-year Bond allotment dropped to N159.287 billion from N282.625 billion.
The number of successful bids plummeted by 50.51%, with only 98 successful bids in December compared to 198 in November.
Despite the decline in participation, marginal rates showed relative stability: The 5-year bond’s marginal rate rose slightly from 21.00% in November to 21.14% in December, while the 7-year bond’s marginal rate remained unchanged at 22.00%.
This suggests sustained investor confidence in the government’s debt instruments, despite seasonal liquidity constraints and end-of-year cautiousness.
The decline in subscriptions and allotments could reflect several factors, including tighter liquidity towards the end of the year and a potentially cautious borrowing strategy by the government to ensure debt sustainability.
The stable marginal rates indicate that the Federal Government continues to offer attractive yields, even as investors exercise caution in response to evolving economic conditions.
