Investor Appetite for FGN Bonds Plummets by 67.5% in March
Investor interest in Federal Government of Nigeria (FGN) bonds took a sharp downturn in March 2025, with total subscriptions falling to ₦530.31 billion, a 67.5% decline from the ₦1.63 trillion recorded in February.
This marks a significant reversal after two consecutive months of strong investor participation, hinting at shifting market sentiment.
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Key Auction Highlights
Auction Date: March 24, 2025
Bonds Offered:
• 5-year FGN APR 2029 (19.30%)
• 9-year FGN MAY 2033 (19.89%)
Total Offer Size: ₦300 billion
Total Subscription: ₦530.31 billion
Despite the lower demand, investor interest was skewed toward the longer-tenured 2033 bond, which attracted ₦471.24 billion in bids, compared to just ₦59.07 billion for the 2029 bond.
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Breakdown of Allotments
FGN APR 2029 (5-Year Bond)
✅ Total Allotment: ₦95.99 billion
Competitive Bids: ₦4.69 billion
Non-Competitive Bids: ₦91.30 billion
Marginal Rate: 19.00%
Coupon Rate: 19.30% (unchanged)
FGN MAY 2033 (9-Year Bond)
✅ Total Allotment: ₦327.69 billion
Competitive Bids: ₦266.54 billion
Non-Competitive Bids: ₦61.15 billion
Marginal Rate: 19.99%
Coupon Rate: 19.89% (unchanged)
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Why the Sharp Decline?
The March auction contrasts sharply with February’s record-breaking ₦1.63 trillion in subscriptions, signaling a more cautious investor outlook. Several factors may have contributed to this:
Lower Inflation: Nigeria’s annual headline inflation eased to 23.18% in February from 24.48% in January, reducing expectations for higher bond yields.
Monetary Policy Speculations: Investors may be adopting a wait-and-see approach amid potential monetary policy shifts.
Market Uncertainty: Changing economic conditions and liquidity concerns may have influenced investor decisions.
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Final Takeaway
In total, the Debt Management Office (DMO) allotted ₦428.68 billion in bonds from the March auction, supported by ₦152.45 billion in non-competitive sales. However, the steep drop in subscriptions raises questions about future demand and whether yield adjustments will be needed to sustain investor interest.
Will investor appetite rebound in the next auction, or are we seeing the start of a broader shift in bond market dynamics?
Stay tuned for more market updates!
#FGNBonds #NigeriaEconomy #DebtMarket #Investment #BondMarket
Investor interest in Federal Government of Nigeria (FGN) bonds took a sharp downturn in March 2025, with total subscriptions falling to ₦530.31 billion, a 67.5% decline from the ₦1.63 trillion recorded in February.
This marks a significant reversal after two consecutive months of strong investor participation, hinting at shifting market sentiment.
⸻
Key Auction Highlights
Auction Date: March 24, 2025
Bonds Offered:
• 5-year FGN APR 2029 (19.30%)
• 9-year FGN MAY 2033 (19.89%)
Total Offer Size: ₦300 billion
Total Subscription: ₦530.31 billion
Despite the lower demand, investor interest was skewed toward the longer-tenured 2033 bond, which attracted ₦471.24 billion in bids, compared to just ₦59.07 billion for the 2029 bond.
⸻
Breakdown of Allotments
FGN APR 2029 (5-Year Bond)
✅ Total Allotment: ₦95.99 billion
Competitive Bids: ₦4.69 billion
Non-Competitive Bids: ₦91.30 billion
Marginal Rate: 19.00%
Coupon Rate: 19.30% (unchanged)
FGN MAY 2033 (9-Year Bond)
✅ Total Allotment: ₦327.69 billion
Competitive Bids: ₦266.54 billion
Non-Competitive Bids: ₦61.15 billion
Marginal Rate: 19.99%
Coupon Rate: 19.89% (unchanged)
⸻
Why the Sharp Decline?
The March auction contrasts sharply with February’s record-breaking ₦1.63 trillion in subscriptions, signaling a more cautious investor outlook. Several factors may have contributed to this:
Lower Inflation: Nigeria’s annual headline inflation eased to 23.18% in February from 24.48% in January, reducing expectations for higher bond yields.
Monetary Policy Speculations: Investors may be adopting a wait-and-see approach amid potential monetary policy shifts.
Market Uncertainty: Changing economic conditions and liquidity concerns may have influenced investor decisions.
⸻
Final Takeaway
In total, the Debt Management Office (DMO) allotted ₦428.68 billion in bonds from the March auction, supported by ₦152.45 billion in non-competitive sales. However, the steep drop in subscriptions raises questions about future demand and whether yield adjustments will be needed to sustain investor interest.
Will investor appetite rebound in the next auction, or are we seeing the start of a broader shift in bond market dynamics?
Stay tuned for more market updates!
#FGNBonds #NigeriaEconomy #DebtMarket #Investment #BondMarket