By Chinwendu Obienyi
The Debt Management Office (DMO) will on Wednesday (today) settle N100 billion worth of Federal Government of Nigeria (FGN) bonds, marking the conclusion of a highly successful auction that attracted robust investor participation and significant oversubscription.
The auction, conducted on Monday, June 23, featured two separate bonds, each with a face value of N50 billion. According to the DMO, the issuance forms part of the Federal Government’s 2025 borrowing plan to finance the national budget and manage the country’s public debt sustainably through domestic sources.
The standout performer in the auction was a newly issued 7-year bond with a coupon rate of 17.95 per cent and a maturity date of June 25, 2032. The instrument generated strong market interest, receiving 209 bids amounting to N561.17 billion in subscriptions over eleven times its offer size. Ultimately, 41 bids were successful, with N98.95 billion allotted to investors.
Also, the second offering was a re-opening of the 19.30 per cent FGN APR 2029 bond (5-year tenor), which cleared at a marginal rate of 17.75 per cent, slightly below its coupon rate. In line with established practice, however, the original 19.30 per cent coupon will remain in effect for interest payments.
Both bonds are priced at N1,000 per unit, with a minimum subscription requirement of N50,001,000 and additional purchases in multiples of N1,000. The interest on the instruments is payable semi-annually, providing a steady stream of income to investors. Principal repayment will be made in full at maturity through a bullet repayment structure.
In a statement accompanying the auction results, the DMO noted that the issuance complied with statutory provisions, including the Debt Management Office (Establishment) Act, 2003, and the Local Loans (Registered Stock and Securities) Act, CAP. L17, Laws of the Federation of Nigeria 2004.
Analysts say the strong demand for the bonds reflects sustained investor confidence in government securities, especially given the attractive yields in a high-inflation environment. It also signals continued appetite for fixed-income instruments amid prevailing market volatility.
“The oversubscription, particularly for the new 7-year bond, suggests that investors are positioning for attractive mid- to long-term yields in anticipation of more stable macroeconomic conditions,” said an Abuja-based fixed income analyst.
With the June auction settled, the DMO is expected to continue its regular monthly issuances in line with the domestic borrowing component of the 2025 budget. Nigeria’s debt office has increasingly relied on domestic bond markets to reduce exposure to exchange rate risk and external shocks.
As of the end of Q1 2025, Nigeria’s total public debt stood at N101.9 trillion, with the domestic component accounting for about 60 per cent. The DMO maintains that the country’s debt profile remains within sustainable thresholds, citing ongoing reforms and revenue mobilisation efforts aimed at reducing fiscal deficits.
Hence, today’s settlement reaffirms the Federal Government’s commitment to responsible debt issuance and market engagement, even as fiscal authorities balance the need for infrastructure financing with prudent debt management.