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2022 Budget Deficit: FG Raises N984.28bn Via Bonds In Four Months – DMO

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2022 Budget Deficit: FG Raises N984.28bn Via Bonds in 4 Months - DMO

The Debt Management Office (DMO) says the federal government has borrowed a total of N984.28 billion through FGN bonds between January and April 2022.

In a bond auction result released by the DMO on Friday, the decision to borrow the funds was in line to raise local funds to finance the N6.26 trillion 2022 budget deficit.

The FGN Bond auction result issued by DMO revealed that the total amount offered between January and April 2022 increased to N675billion as against N600 billion offered between January and April 2021.

The DMO’s FGN bond auction result, showed that the N225 billion offered in April 2022 is the highest so far this year. The raised amount in April was N219.88billion.

The DMO in the first three months of 2022 offered N150 billion, while amount raised eventually was N764.4billion, attributable to investors’ oversubscription.

A total of N1.3 trillion oversubscription was reported by the DMO in the four months under review.

Monthly breakdown revealed that FG bond issuance for the month of January 2021 by the DMO recorded an oversubscription of N175.24 billion to stand at N170.64 billion despite only seeking to raise N150 billion in its 20-year bond issuance.

DMO issued two tranches of bonds in its first issuance for the year, reopening its 12.50 per cent FGN Jan 2026 bond and issuing a new 13.00% FGN Jan 2042, which is set to mature by 2042.

The breakdown of the report by DMO revealed that the first tranche was oversubscribed by N36.19 billion with subscriptions of N111.19 billion, surpassing the offered amount of N75 billion, while the second tranche was oversubscribed by N139.05 billion over the N75 billion offered amount.

However, in February, the FGN bond issuance by the DMO recorded an oversubscription of N407.72 billion over the intended N150 billion

The bond issuance was auctioned in two tranches with 12.5% FGN Jan 2026 bond programme seeking to raise N75 billion, which gathered a total subscription book of N325.40 billion across 230 bids with a marginal rate of 10.95per cent

The second bond programme, the 13% FGN Jan 2042 bond raised a total subscription of N232.32 billion across 151 bids, representing a N157.32 billion oversubscription on the offered amount of N75 billion with a marginal rate of 13per cent.

For March, FGN bond issuance recorded an oversubscription of N448.42 billion over the intended N150 billion offered by the DMO.

The bond issuance was auctioned in two tranches with a 12.5% FGN Jan 2026 bond programme seeking to raise N75 billion, which gathered a total subscription book of N231.02 billion across 97 bids, with a marginal rate of 10.1500 per cent.

In the same vein, the second bond programme, the 13% FGN Jan 2042 bond raised a total subscription of N367.40 billion across 141 bids, representing an N157.32 billion oversubscription on the offered amount of N75 billion with a marginal rate of 12.700 per cent.

In addition, FGN bond issuance for April 2022 recorded an oversubscription of N184.46 billion over the intended N225 billion offered by the DMO.

The bond issuance was auctioned in three tranches with a 13.53 per cent FGN Mar 2025 bond programme seeking to raise N75 billion, which gathered a total subscription book of N108.43 billion across 87 bids, with a marginal rate of 10.00 per cent.

In the same vein, the second bond programme, the 12.5 per cent FGN Apr 2042 bond raised a total subscription of N78.22 billion across 227 bids, representing an N3.27 billion oversubscription on the offered amount of N75 billion with a marginal rate of 12.50 per cent.

The DMO in April re-opened 13.00 per cent FGN Jan 2042 (20-year bond) bond programme with an offer of about N75 billion, which gathered a total subscription book of N222.76billion across 113 bids and finally allotted N79.68billion to investors.

The 13.00 per cent comes with a marginal rate of 12.90 per cent.