Nigeria’s Debt Management Office (DMO) reported robust investor interest in its latest federal bond auction, with approximately ₦186 billion ($119 million) allocated across two reopened bond issuances. The July 28 auction exceeded initial targets, signaling confidence in the federal government’s debt instruments amid evolving economic conditions.
Total investor subscriptions reached ₦39.1 billion for the five-year bond maturing in April 2029 and ₦261.6 billion for the seven-year bond due in June 2032. However, the DMO allotted ₦13.4 billion and ₦172.5 billion, respectively, resulting in a combined ₦185.9 billion—surpassing the original ₦80 billion offering. This marked a notable increase from the ₦100 billion raised in June 2025, reflecting heightened demand for longer-dated securities.
The five-year bond, carrying a 19.30% coupon rate, and the seven-year bond at 17.95% were reissued at lower marginal rates of 15.69% and 15.90%, respectively. Analysts interpret this yield compression as a potential indicator of easing inflation expectations or optimism around monetary policy stability. Both bonds will distribute semi-annual interest payments and repay principal through lump-sum settlements at maturity.
Participation data revealed 149 total bids, with 74 accepted. The seven-year instrument dominated interest, securing 209 bids worth ₦561.2 billion, though only 41 bids (totaling ₦99 billion) succeeded. In contrast, the five-year bond saw limited allotments despite strong demand: 30 bids worth ₦41.7 billion yielded just ₦1.05 billion in accepted offers.
Structured under Nigerian financial regulations, the bonds were priced at ₦1,000 per unit, requiring a minimum subscription of ₦50.001 million. The DMO emphasized compliance with local securities laws, including the DMO Establishment Act (2003), ensuring alignment with statutory borrowing frameworks.
Settlement is set for July 30, 2025. Market observers note the auction’s outcome underscores continued appetite for Nigerian sovereign debt, particularly longer-tenor instruments, despite global macroeconomic uncertainties. The divergence between subscription and allotment volumes, however, highlights selective investor strategies favoring specific yield profiles and maturities.
