DMO opens N750bn FGN Bonds for subscription

The Debt Management Office (DMO) is scheduled to conduct its monthly Federal Government Bond auction today with three reopening instruments worth N750 billion.

The monthly bonds supply will feature 17.945% FGN AUG 2030, which will be reopened for subscription, 17.95% FGN JUN 2032 and 19.89% FGN MAY 2033.

The 5-year reopened bonds worth N250 billion will be offered for subscription, the 7-year paper worth N200 billion is among the auction offerings, and the 10-year local bonds totalling N300 billion will be for sale.

Investment firm AAG Capital said Bond yields are expected to be higher at today’s auction as risk-off sentiment persists across asset classes due to the prolonged crisis in the Middle East, in a normal scenario. Actual cutoff would be determined by Issuer’s preferred funding cost at this time”.

Last week, trading activity was largely concentrated in mid-dated bonds with instruments like the 2031s and 2032s attracting consistent demand in the secondary market.

Fixed-income market analysts said there were also occasional flows into longer-dated bonds, but investors generally preferred to stay within the mid-range, where risk and return are better balanced.

As a result of this selective buying interest, average bond yields declined by 19 basis points week-on-week to 15.78%, indicating a modest improvement in demand.