The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria, will reopen two FGN Bonds to raise a combined N1.2 trillion at an auction scheduled for Sunday, June 22, 2026.
In its official offer circular published on Monday, June 15, the debt office disclosed that it will offer N600 billion each in a 10-year and a 20-year bond re-opening with settlement scheduled for June 24, 2026.
The planned issuance forms part of the Federal Government’s domestic borrowing programme aimed at funding budgetary obligations and managing public debt.
What the data is saying:
The offer circular indicates that the N1.2 trillion will be raised through two bond re-openings across medium- and long-tenor maturities, with settlement set for Tuesday, June 24, 2026.
- N600 billion will be offered in the 22.60% FGN JAN 2035 (10-year re-opening)
- N600 billion will be offered in the 16.2499% FGN APR 2037 (20-year re-opening)
- Successful bidders will pay a price corresponding to the yield-to-maturity that clears the auction volume, plus any accrued interest on the instrument.
Subscriptions are priced at N1,000 per unit, with a minimum investment of N50,001,000 and in multiples of N1,000 thereafter. Interest payments will be paid twice in a year, while principal is repaid in full in one lump sum at maturity.
More insights:
The June 22 auction is coming at a time when the CBN is conducting aggressive liquidity tightening using Open Market Operations (OMO) that seem to have triggered significant rise in yields in the fixed income market.
- Against this backdrop, the N1.2 trillion is one of the largest single FGN Bond auction offers in recent months suggesting further liquidity tightening.
- The 10-year 22.60% FGN JAN 2035 bond carries a significantly higher coupon than the 20-year 16.2499% FGN APR 2037.
- This reflects the period in which each instrument was originally issued and the rate environment prevailing at the time.
- The lower coupon on the longer-dated 2037 bond means successful bidders are likely to price it at a discount.
Investor appetite for longer dated FGN paper has been consistently robust in previous sessions, supported by pension funds and insurance companies seeking duration-matched, tax-exempt instruments.
What you should know:
FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria, making them among the safest domestic investment instruments available.
- The bonds are listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange, providing secondary market liquidity for investors.
- All FGN Bonds qualify as liquid assets for banks’ liquidity ratio calculations and are exempt from certain taxes for pension funds and other qualifying investors under the Companies Income Tax Act (CITA) and Personal Income Tax Act (PITA).
- The bonds also qualify as securities in which trustees may invest under the Trustee Investment Act.
- Under the auction system, pricing reflects investor demand rather than fixed rates, with allocations made at the yield-to-maturity that clears the volume on offer.
- Market participants are likely to watch the June 22 auction to gauge yield direction, particularly on the longer end of Nigeria’s sovereign yield curve.
In recent times, yields have been trending higher at both the primary and secondary markets. The coupon rates and market pricing will determine the effective cost of this borrowing tranche for the Federal Government.