The DMO held its final monthly auction of FGN bonds for the year on Wednesday, and raised N54bn (US$300m) from the sale of three debt instruments.
These were all reopened issues (13.05% Aug ‘16s, 14.20% Mar ‘24s and 12.15% Jul ‘34s).
The marginal rates (effective cut-off points) widened in each case from the previous month, by between 240bps and 350bps.
The total bid of N94bn was the lowest of the year and about 10% below the previous month. This is due in part to concerns surrounding pressures on the naira exchange rate following the slide in oil prices. Furthermore, participation by local investors waned due to the lure of higher yields on money market instruments.
At this auction, offshore investors showed very little interest while the participating PFAs concentrated on the longer dated instruments. The DMO only achieved its sales target for the long bond (Jul ’34), and then at a price.
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