The federal government said it has received total bids of N134.056 billion for the December 2020 bond offer worth N60 billion, indicating it was oversubscribed by N74.056 billion (over 220%).
Techeconomy.ng obtained this from a statement released by the Debt Management Office (DMO) on Wednesday, December 23.
The statement read: “The Debt Management Office offered a total of N60 Billion at the FGN Bond Auction of December 2020, which held on December 16, 2020.
“The offer was oversubscribed as total Bids received were N134.056 billion, a subscription level of over 220%.
“The oversubscription is sequel to higher rates for December 2020 at 6.945% and 7.000% for the 15-year and 25-year FGN Bonds, compared to the rates of 5.000% and 5.785% at the last auction in November 20.”
This medium understands that the FGN Bonds are debt securities issued by the Debt Management Office (DMO) for and on behalf of the Federal Government and backed up by its ‘full faith and credit’.
And of course, the government has an obligation to pay the bondholder the principal and agreed interest (tax-free) as and when due.
Suffice to state that the government issues bonds for numerous reasons which include; financing the government’s fiscal deficits, diversifying government financing sources, deepening savings and investment culture in the country amongst others.