At the August 2022 bond auction held on Monday, the federal government, through the Debt Management Office (DMO), raised N200.58 billion. Its original goal for the auction was to raise N225 billion, so this fell less of the target.

Through the reopening of the 13.53 percent FGN MAR 2025 10-year paper, 12.5 percent FGN APR 2032 10-year paper, and 13 percent FGN JAN 2042 20-year paper, the DMO had intended to raise N75 billion total. The 2025 bond at 12.5% raised N4.21 billion at the end of the auction, despite a subscription of N23.014 billion, and N28.84 billion of the N40.79 billion subscription for the 2032 paper at 13.5% was assigned.

The 2042 paper raised the most money with an allocation of N167.53 billion from a N183.28 billion subscription at a 14% yield. Allotment took place by open bidding.

What you should know?

  • In a government bond, you lend money to the government in exchange for an agreed-upon interest rate. This is a type of debt-based investment. Governments use them to raise money for infrastructure or new projects, and investors can use them to receive a fixed return paid on a regular basis.
  • As of March, of this year, 70% of the government’s domestic debt portfolio is made up of FGN bonds. Out of the overall domestic debt of N20.144 trillion, the amount of government bond obligations was N14.24 trillion.
  • The amount of interest paid by the government on the FGN bonds obligation in the first three months of this year totaled N630.53 billion, bringing the total amount of domestic debt payment from January to March this year to N668.685 billion.
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