Nigeria’s corporate bond market maintained its strong momentum in June 2026, with the total outstanding value of corporate bonds on the FMDQ Exchange climbing to N2.30 trillion, reinforcing its position as the country’s leading source of long-term corporate financing. According to the latest FMDQ Exchange fixed income market report, the figure represents a slight increase from N2.29 trillion recorded in May, highlighting the resilience of the debt capital market despite a slowdown in new bond issuances.
Although fresh corporate bond listings slowed significantly during the month, the market remained stable following a remarkable surge in April, when new issuances reached N531.89 billion. June recorded N15 billion in new corporate bond listings, recovering from the zero issuance seen in May but still far below the highs witnessed earlier in the year. The outstanding value of corporate bonds has remained above the N2 trillion mark since April, reflecting sustained investor confidence and continued demand for long-term financing instruments.
The commercial paper (CP) market also showed encouraging signs of recovery after months of decline. Outstanding CP value increased to N465.34 billion in June from N448.88 billion in May, extending its rebound from April’s low of N319.51 billion. However, new CP issuances weakened sharply, falling to N36.79 billion from N189.15 billion in May. Despite the slowdown in fresh listings, the increase in outstanding value suggests investors remain interested in short-term debt instruments, while the average tenor of quoted commercial papers lengthened to 290 days, indicating growing preference for medium-term investments.
Funding conditions also improved as borrowing costs continued to ease across the market. The average discount rate for quoted commercial papers declined to 19.18% in June from 19.78% in May, extending the downward trend from the 22.49% peak recorded a year earlier. Rates fell across both short and medium-term maturities, while five-to-ten-year local currency corporate bonds averaged 18%, making long-term borrowing relatively more attractive. The telecommunications sector dominated quoted CP activity during the month, accounting for 60% of the market, with financial services and healthcare contributing 20% each.
The latest figures underline the growing strength of Nigeria’s debt capital market despite a challenging interest rate environment. Corporate bonds remain nearly five times larger than the commercial paper market, cementing their role as the preferred funding vehicle for major businesses seeking long-term capital. While June witnessed fewer new issuances, analysts believe the combination of declining borrowing costs, recovering commercial paper values, and resilient investor demand could pave the way for stronger fundraising activity in the months ahead, signaling continued confidence in Nigeria’s fixed-income market.
source: nairametrics
