Fed Govt raises N533m in maiden 2023 bonds

• Published date: 16 January 2023
• Publication title: Nigeria - The Nation

The Federal Government has raised N533.03 million in its maiden bond issuance in the year, as the government begins the long haul to bridge the N11.34 trillion 2023 budget deficit.

Data obtained at the weekend indicated that the government, through its debt issuance and management agency, Debt Management Office (DMO), allotted new savings bonds worth N533.03 million to investors last week.

A breakdown indicated that the government, under its Federal Government of Nigeria Savings Bond (FGNSB), allotted N145.42 million bonds with two-year tenor and N387.61 million bonds with three-year tenor.

Compared with similar debt issuance last December, the January 2023 allotment indicated that allotment for two-year bonds decreased by 51.17 per cent compared to N297.81 million allotted in December 2022 while allotment for three-year bonds declined by 57.34 per cent when compared with N908.65 million allotted in December 2022.

The government offered the January 2023 two-year sovereign retail bond at a coupon of 9.6 per cent yearly, 21.7 per cent below the 12.255 per cent offered on similar bond last December. It also offered three-year FGNSBs at a coupon of 10.6 per cent yeearly, 20.03 per cent below 13.255 per cent offered for similar bond last December.

While more investors appeared to favour the longer-tenored issuance, the number of successful subscriptions also declined considerably in January 2023 when compared with December 2022. Successful subscribers for two-year FGNSBs dropped from 153 in December 2022 to 88 in January 2023 while that of three-year bonds dropped from 294 in December 2022 to 2025 in January 2023.

The January 2023 issuance was the 67th tranche of the savings bond, introduced in 2017.

The coupons or interest rates for the new issuances, which are traditionally paid quarterly, would be paid on April 11, July 11, October 11 and January 11 respectively.

The FGNSBs are designed to have most of the features of the existing sovereign bond but...