Figures released by the Debt Management Office show that from its August 2025 bond auction, the Federal Government of Nigeria has raised N136.16 billion.
Alongside the auction on Monday was a fresh five-year local bond maturing in August 2030 with a coupon rate of 17.95 percent. A seven-year bond, also priced at 17.95 per cent, slated to mature in June 2032, reopened.
With total bids of N268.17 billion over the two instruments, investors were actively participating. Market opinion, however, clearly favored the long-term bond, which attracted subscriptions totaling N165.81 billion, surpassing the initially offered N100 billion.
According to the DMO, subscriptions for the new five-year bond totaled N102.36 billion, just surpassing the N100 billion made available. With the other bids rejected, N46.005 billion was eventually allocated at a spot rate of 17.945 percent. Authorities chose to raise N165.81 billion for the reopened seven-year bond, while also increasing the spot rate by 2.1 percent to 18 percent, indicating increased demand for better yields in the fixed-income market.
The New Chronicle observed that investors’ growing preference for longer-term assets—even at somewhat higher interest rates—is evident in these auction outcomes. Analysts believe this trend reflects sustained inflation expectations and potential changes in monetary policy, thereby incentivizing investors to seek higher yields on government debt instruments.
The bonds issued will be repaid at maturity in full by means of a bullet repayment strategy, where the principal is settled in accordance with the DMO a single lump sum instead than delayed payments. This architecture supports Nigeria’s bond issuance plan and enhances investors’ confidence in the administration’s repayment capabilities.
Though the administration efficiently raised money, the underparticipation of the new bond shows a conservative viewpoint among investors who might be assessing the prospective future. Changes in interest rates and the dangers of inflation. Still, the positive outcome of the August auction underscores the continued importance of Nigeria’s local debt market as a vital tool for funding budget needs and promoting economic stability.
