The Debt Management Office (DMO) has successfully raised ₦185.9 billion from the July 2025 Federal Government of Nigeria (FGN) bond auction, significantly exceeding the total amount offered and signaling growing investor confidence in Nigeria’s debt instruments.
The auction, conducted on July 28, 2025, featured the re-opening of two existing FGN bonds: the 19.30% FGN APR 2029 (5-Year) and the 17.95% FGN JUN 2032 (7-Year) bonds. According to the DMO’s official auction results published on its website, a total of 149 bids were received across both maturities, reflecting strong market appetite.
Breakdown of Auction Results
- APR 2029 Bond (19.30% Coupon Rate)
- Offer: ₦20 billion
- Subscriptions: ₦39.075 billion
- Allotment: ₦13.430 billion
- Marginal Rate: 15.69%
- JUN 2032 Bond (17.95% Coupon Rate)
- Offer: ₦60 billion
- Subscriptions: ₦261.597 billion
- Allotment: ₦172.502 billion
- Marginal Rate: 15.90%
While both bonds retained their original coupon rates (19.30% and 17.95%), the marginal rates at which they were allotted came in significantly lower. This drop in yields is widely interpreted by analysts as a signal that investors anticipate easing inflation and stable interest rates over the medium term.
Yield Curve Sentiment: What the Market Is Saying
Speaking to BusinessDay, a Lagos-based investment analyst, Tolu Fagbohun, explained that the lower marginal rates “underscore improved investor sentiment towards government debt and expectations of a less aggressive monetary policy stance by the Central Bank in the coming months.”
“This also suggests that institutional investors are looking for safe havens amid the global economic uncertainties, and Nigerian sovereign bonds—despite currency risks—are offering attractive real yields,” Fagbohun noted.
Comparison With June Auction
Compared to June’s auction, where only ₦100 billion was offered, the July result reflects a near doubling in successful allotments, signaling both increased demand and the government’s aggressive push to fund budgetary gaps through domestic borrowing.
In June:
- The APR 2029 bond received ₦41.7 billion in subscriptions, but only ₦1.05 billion was allotted at 17.75%
- The newly issued JUN 2032 bond saw ₦561.2 billion in subscriptions, with ₦98.95 billion allotted at 17.95%
Regulatory Backing and Payment Terms
The bond auction was conducted under the legal framework of the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, ensuring transparency and accountability in public debt issuance.
Each bond unit is priced at ₦1,000, with a minimum investment threshold of ₦50.001 million, and interest is payable semi-annually, providing investors with regular income. The bonds will be redeemed via bullet repayment—meaning full principal repayment will be made at maturity.
Why It Matters
This development is not just a success for the DMO—it is a positive signal for Nigeria’s domestic debt market. It suggests improved investor confidence, possibly stemming from recent forex market reforms, stable oil output, and tighter fiscal discipline.
According to a senior official at the DMO who spoke with Nairametrics off the record, “The oversubscription shows that both local and foreign investors still see value in Nigerian sovereign instruments. It also means the government can raise funds to plug revenue shortfalls without being overly reliant on foreign loans.”
What to Watch
With Nigeria’s inflation rate hovering above 23% and the naira still battling parallel market pressures, bond yields could remain volatile. However, if the Central Bank maintains monetary policy stability and government reforms take hold, we may see a continued shift from speculative to long-term capital inflows.
Settlement for the July auction is scheduled for July 30, 2025.
