FG Returns To Bond Market With Fresh ₦1.2trn Offer

• The Federal Government is seeking to raise up to N1.2 trillion by reopening three FGN bonds, reinforcing its reliance on the domestic debt market to finance budget implementation and manage public debt obligations.
• Rather than issuing new securities, the DMO is reopening existing bonds, a strategy that helps deepen liquidity in the bond market while giving investors access to established benchmark instruments across different maturities.
• The auction will also serve as a key test of investor appetite for long-term government debt at a time when elevated interest rates and inflation continue to shape investment decisions in Nigeria’s fixed-income market.

July 14, () — The Debt Management Office (DMO), on behalf of the Federal Government, has returned to the domestic debt market with plans to raise ₦1.2 trillion through the reopening of three Federal Government of Nigeria (FGN) bonds, as authorities continue to rely on local borrowing to finance budget implementation and manage public debt obligations.

The offer, announced in an Offer Circular issued on Tuesday, will see the government reopen three existing bond instruments worth ₦400 billion each, with the auction scheduled for July 20 and settlement expected on July 22.

The reopening comes less than one month after the DMO conducted another ₦1.2 trillion bond auction in June, highlighting the government’s continued use of the domestic bond market to meet financing needs while providing investors with access to long-term sovereign securities.

What the latest offer means

Unlike a new bond issuance, a reopening increases the size of existing bonds already trading in the market. This helps improve liquidity by making the securities more actively traded, while allowing the government to raise additional funding without creating entirely new instruments.

The DMO is offering ₦400 billion each in the 22.60 percent FGN January 2035 Bond, the 15.45 percent FGN June 2038 Bond, and the 16.2499 percent FGN April 2037 Bond.

Successful investors will purchase the bonds based on the yield-to-maturity that clears the auction, in addition to accrued interest. Coupon payments will be made semi-annually, while the principal will be repaid at maturity.

The securities are backed by the full faith and credit of the Federal Government and qualify as trustee investments, tax-exempt securities under relevant tax laws, eligible pension fund assets, and liquid assets for banks’ liquidity ratio calculations.

Why investors are watching

The auction is expected to attract interest from pension fund administrators, banks, insurance companies, and other institutional investors seeking relatively secure long-term investments backed by the Federal Government.

Beyond the borrowing itself, the auction will provide another gauge of investor demand for government securities at a time when interest rates remain elevated, and inflation continues to shape fixed-income investment decisions.

Strong demand could help the government raise funds at competitive borrowing costs, while a weaker appetite may place upward pressure on yields in subsequent auctions.

The latest reopening also reinforces the Federal Government’s strategy of leaning on the domestic debt market to finance fiscal operations while maintaining a regular supply of benchmark securities for investors, even as authorities continue to balance funding needs with debt sustainability considerations.