The Debt Management Office (DMO) has said the N60 billion bond it offered for the month of December had been oversubscribed by more than N70 billion.
FGN Bonds are debt securities issued by the DMO for and on behalf of the Federal Government and the government has an obligation to pay the bondholder the principal and agreed on interest as and when due.
The organisation stated that the rates of 6.945 per cent and 7.000 per cent for the 15-year and 25-year FGN Bonds, were higher than the rates of 5.000 per cent and 5.785 per cent at the last auction in October.
This is contained in a statement obtained from DMO’s website on Wednesday.
“DMO offered a total of N60bn at the FGN Bond Auction of December 2020, which held on December 16. The offer was oversubscribed as total bids received were N134.056 billion, a subscription level of over 220 per cent.
“The rates reflect the level of interest rates in the market influenced in part by Monetary Policy Actions,’’ it said.
The Federal Government issues Bonds for many reasons some of which include, to finance government fiscal deficits in a non-inflationary and sustainable manner, to enhance the fiscal discipline of the Government, to refinance maturing debt obligations, and to establish a benchmark yield curve.
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