AGS NEWS – The Federal Government raised approximately N4.13tn from bonds in the first half of 2024, according to the FMDQ Exchange Financial Markets Monthly Report for June 2024.

The bond issuance in June, valued at N297.01bn, was the lowest in six months, with the highest issuance in February at N1.49tn.

In January, FGN bonds were valued at N418.20bn, followed by N608.86bn in March, N628.81bn in April, and N682.07bn in May.

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By the end of June 2024, the value of outstanding FGN bonds, including savings and green bonds, was N26.22tn, a 44.49% increase from N18.15tn in June 2023.

The Debt Management Office (DMO) attributed the large bond issuance in February to the FGN’s financing needs and the opportunity to attract foreign investors.

The Federal Government offered N1.25tn seven-year bonds maturing in 2031 and N1.25tn 10-year bonds maturing in 2034, receiving total bids of N1.9tn and allotting N1.49tn.

In Q2, seven bonds were reopened, with interest rates ranging from 18.50% to 19.89%. As of May, the DMO had N1.5tn left to raise from the proposed N6tn bond, having already raised N4.5tn from previous issuances.

DMO Director General Patience Oniha emphasized the significance of domestic securities for Federal Government spending.

She noted that N7tn was raised as new domestic borrowing last year, highlighting the domestic market’s resilience and sophistication.

Investor interest in long-term FGN bonds has risen, with Q1 2024 capital importation hitting $3.38bn, driven by interest rate hikes in Nigeria and cuts in advanced economies.

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Foreign portfolio investment accounted for 61.5% of total capital imported, up from 28.5% in Q4 2023.

Analysts predict an upward repricing of fixed-income instruments, making these investments more attractive.

Meanwhile, Finance Minister Wale Edun announced plans for a $500m diaspora bond to stabilize and grow the economy.