The Debt Management Office (DMO) of Nigeria is set to finalise and settle a N100 billion bond issuance today, June 25, 2025. This marks the conclusion of a highly successful auction held two days earlier, which attracted overwhelming investor interest and significant oversubscription. The bond sale aligns with the Federal Government’s 2025 borrowing strategy aimed at financing the national budget and managing public debt through domestic sources.
The auction featured two bonds of N50 billion each. The newly introduced 7-year bond with a 17.95% coupon rate maturing in June 2032 stood out, garnering 209 bids totaling N561.17 billion—over eleven times its offer. Of these, 41 bids were accepted, and nearly the full amount, N98.95 billion, was allotted. The second bond, a re-issue of the 19.30% FGN APR 2029 bond, cleared at a slightly lower marginal rate of 17.75%, but will still pay the original coupon rate.
Both bonds were priced at N1,000 per unit, with a minimum purchase of N50,001,000. They offer semi-annual interest payments and bullet repayment at maturity, making them attractive for investors seeking steady income in a high-inflation environment. The issuance was conducted under legal frameworks, including the DMO Act and the Local Loans Act, reinforcing its legitimacy and alignment with statutory borrowing provisions.
Analysts view the strong demand as a vote of confidence in government securities and a reflection of investor appetite for secure, high-yield instruments amidst market uncertainties. The oversubscription, especially for the new bond, suggests investor optimism about mid- to long-term economic stability and the government’s fiscal credibility.
As of Q1 2025, Nigeria’s public debt stands at N101.9 trillion, with domestic borrowings making up around 60%. The DMO is expected to continue its monthly auctions to support the 2025 budget while managing debt exposure prudently. Today’s settlement underscores the government’s strategic use of local markets to fund development while mitigating risks from foreign exchange and global volatility.
Source: The Sun