Corporate and government-backed institutions in Nigeria paid as much as 20% in coupon rates to raise funds from the debt capital market during the first half of 2026, highlighting the growing cost of borrowing amid persistent inflation and elevated interest rates. Data from the FMDQ Securities Exchange and the Nigerian Exchange (NGX) shows that issuers raised hundreds of billions of naira to refinance existing debts, finance infrastructure projects, boost liquidity, and support business expansion across key sectors of the economy.
The review revealed that coupon rates on newly issued bonds ranged between 15.50% and 20.00%, reflecting the premium investors now demand before committing long-term capital. The highest coupon was offered by Veritasi Homes & Properties Plc, which issued a three-year ₦10 billion debut bond at 20% to finance housing developments. Champion Breweries Plc followed closely with a 19.50% five-year bond, while Paras Energy Funding SPV Plc raised ₦15 billion at 18% to support power generation expansion and refinance existing obligations.
Among the biggest fundraisers during the period was NBET Finance Company Plc, which topped the list after issuing ₦501.02 billion in bonds at 17.50% to address liquidity challenges in Nigeria’s electricity sector. Lagos State Government also returned to the market, raising a combined ₦244.82 billion through a 10-year bond and a five-year Green Bond aimed at funding infrastructure, clean transportation, and climate resilience projects. In the banking sector, Access Bank Plc secured ₦193.83 billion through a senior unsecured bond priced at 15.50%, while UAC of Nigeria Plc raised ₦54.03 billion to refinance debt and support its integration of CHI Limited.
Beyond the major bond issuances, several companies accessed short-term financing through commercial papers. Sunbeth Global Concepts Limited quoted ₦150.41 billion in commercial papers with implied yields reaching 23.50%, one of the highest returns in the market. Other firms, including Daraju Industries, TeleAfrica Communications, Accion Microfinance Bank, SKLD Integrated Services, and Sycamore Integrated Solutions, also raised funds to finance working capital and business operations, reflecting sustained demand for alternative funding despite the challenging interest rate environment.
For investors, older corporate bonds from issuers such as MTN Nigeria, Dangote Cement, AXA Mansard, and Interswitch Africa remain actively traded, although they generally offer lower coupon rates ranging from 12.50% to 15.50% because they were issued during periods of lower interest rates. The sharp difference between older and newly issued bonds underscores how Nigeria’s current economic conditions continue to influence borrowing costs. Despite the higher expense, the strong participation from both corporate and public-sector issuers suggests confidence in the debt market and a continued appetite for long-term capital as organizations position themselves for future growth.
source: nairametrics
