Investors Demand 302 billion Naira Bond At Wednesday's Auction

In spite of indirect regulatory discouragement of banks from investing their surplus cash in government debt, demand at the Wednesday's bond auction was oversubscribed by207.6 percent, the Debt Management Office (DMO) has said.

The debt office had offered 145 billion worth of bond at the monthly auction, but investors staked about 301.02 on the debt notes on offer at the auction on Wednesday, the results of the debt auction posted by the DMO on Wednesday showed.
The DMO had offered 45 billion naira in 5-year bond, 45 billion naira in the 10-year paper and 55 billion of the longest 30-year tenor at the auction, totaling 145 billion naira.
"298 Competitive Bids were received from Investors for the three (3) Instruments, with a total value of ₦301.02 Billion, indicating a subscription level of 207.6%.," the debt office said in a statement on Wednesday.
It said allotments were made on successful bids at 13.35% for the 5-year, 13.64% for the 10-Year and 14.12% for the 30-Year Bonds, which were consistent with Secondary Market Yields and also represented a decline in the marginal rates compared with those at the June 2019 bond auction.
"The total amount allotted for Competitive Bids was ₦86.82 Billion from the total subscription of ₦301.02 billion. In addition, the sum of ₦58.20 Billion was allotted across the three (3) tenors for Non-Competitive Bids at the same rates with the Competitive Bids," according to the DMO.
The debt office said It raise a total of 145.02 billion naira at the Auction through both Competitive and Non-Competitive Bids.
"The amount raised is to be utilised to part-finance the 2019 Budget of the Federal Government." the debt office said.
The Central Bank of Nigeria (CBN) governor, Godwin Emefiele has said the regulatory bank had discouraged banks from investing their surplus cash in government treasury at an auction last week in a bid to boost lending to the private sector.
The regulator said over 70 percent of banks liquid assets are invested in government bond and other debt instruments, crowding our the private sector from accessing short term fund for expansion.