FG Raises N55bn from debt market

The Federal Government raised a total of
N55bn from the debt market in July, it was
learnt on Thursday.

This amount represents an increase of
34.19 per cent or 164 per cent over
N20.81bn borrowed by the regulatory
authority in the month of June.
This information was contained in the July
edition of the Monthly Financial and
Economic Report of the Financial Markets
Dealers Association released on Thursday.

"The regulatory authority in the debt
market raised N55bn relative to N20.81bn
borrowed in the preceding month,
reflecting a significant increase of 164.30
per cent," the report said.

An analysis of the report also shows that
this amount represents a decline of 8.91
per cent or 11 per cent over N83.91bn
borrowed by the regulatory authority in
the month of June.

The amount represents a decrease of 27
per cent when compared to N75bn raised
from the debt market in July 2012.
The report noted that in the month under
consideration, two securities which had
reached maturity, were reopened.

The securities are the 4.00 per cent FGN
APR 2015 (five-year original tenor) and the
10.00 per cent FGN JUL 2030 (20 year
original tenor).
It added that the total public subscription
in the month for the two bonds amounted
to N135.93bn as against N157.04bn for the
three bonds issued the previous month.

The report said, "The successful bids that
ranged from 12.00 per cent to 16.50 per
cent for the instruments were allotted at
the stop rates of 13.45 per cent and 13.79
per cent for four per cent FGN APR 2015
and 10 per cent FGN JUL 2030 securities,
respectively.

"The marginal rates of both securities
increased compared to June's figure, to
reflect prevailing price at the Over-the-
Counter market, as yields stabilised
relatively above 13 per cent levels
following improvement in local investors'
sentiment market self-correction dynamics
as well as gradual re-entry by offshore
institutional investors."

It explained that the bonds market deals
for the month fell slightly by 4.63 per cent
compared to last month's which increased
by 29.04 per cent, while the volume/face
value fell by 27.91per cent as against 22.82
per cent increase recorded in June 2013.

The report said, "The highest traded and
priced bond was the 16.39 per cent FGN
JAN 2022 while the lowest traded was the
9.35 per cent FGN NOV 2017, and the 8.50
per cent FGN NOV 2029 was recorded as
the lowest priced bond."

"At the two-way quote bonds market,
activities were further concentrated at the
short and intermediate end of the yield
curve with relative improvement in
investors' sentiment for longer tenured
bonds as witnessed within the last two
weeks of the month," it added.

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