The Debt Management Office (DMO), representing the Federal Government of Nigeria (FGN), has officially announced a new round of bond offerings totaling ₦80 billion, scheduled for public auction on July 28, 2025. This move, according to a circular published on the DMO’s official website on Wednesday, forms part of the government’s ongoing strategy to raise funds from the domestic capital market to support budgetary implementation and infrastructure development.

The auction comes on the heels of a successful, albeit mixed, result from June’s bond sale, and continues the DMO’s trend of tapping into the domestic debt market to finance the nation’s fiscal deficits while promoting investment in government securities.

Breakdown of the Offer: Two Re-Opened FGN Bonds

The July 2025 auction comprises two tranches of re-opened Federal Government of Nigeria bonds, which were previously issued but are now being re-offered to investors.

1. ₦20 Billion – 19.30% FGN APR 2029 Bond:
   This bond has a five-year tenor, maturing on April 17, 2029, and carries a coupon rate of 19.30%. Originally issued earlier in the year, it is being reopened for subscription to allow more investors access to its relatively high-yield structure.

2. ₦60 Billion – 17.95% FGN June 2032 Bond:
   This instrument has a seven-year maturity and a coupon rate of 17.95%, set to mature on June 25, 2032. It represents a longer-term investment option for those seeking stability and fixed returns.

The interest rates for both bonds will be set based on the bid yield-to-maturity that clears the offered volume at auction. Since these are re-openings of existing bonds, the yield will vary depending on prevailing market conditions and investor demand.

Payment Structure: Interest and Principal

Both bonds will follow a semi-annual interest payment schedule, ensuring investors receive interest payouts twice a year. The principal amount will be repaid in full at maturity through a bullet repayment, meaning investors will receive the full face value of their holdings on the final maturity date.

This payment model appeals to long-term investors such as pension funds, insurance companies, and retail investors seeking stable returns with predictable payment timelines.

Comparison with June 2025 Auction

Notably, the ₦80 billion target for July is ₦20 billion less than the ₦100 billion offered during the June 2025 bond auction, suggesting a slightly more conservative approach this time around.

Here’s a snapshot of how the June 2025 auction played out:

• First Instrument (19.30% APR 2029):
  This five-year bond attracted 30 bids totaling ₦41.685 billion in subscriptions. However, only two bids were successful, resulting in a final allotment of just ₦1.050 billion.

• Second Instrument (17.95% June 2032):
  This seven-year bond recorded massive investor interest with 209 bids totaling ₦561.170 billion. Ultimately, 41 bids were accepted, and a significant ₦98.950 billion was allotted.

The disparity in results between the two tranches in June shows varying investor appetite based on tenor, pricing, and perceived risk.

Legal and Regulatory Framework

The DMO emphasized that this issuance complies fully with relevant legislative frameworks, including:

• The Debt Management Office (Establishment) Act, 2003

• The Local Loans (Registered Stock and Securities) Act, CAP. L17, Laws of the Federation of Nigeria, 2004

These laws empower the DMO to issue debt instruments on behalf of the Federal Government and ensure the protection of investor rights, transparency, and accountability in the public debt issuance process.

Investor Participation and Access Channels

To participate in the auction, interested investors—both institutional and individual—are advised to approach any of the authorised Primary Dealer Market Makers (PDMMs). These institutions are responsible for underwriting the bonds and facilitating secondary market trading, thereby maintaining liquidity and price stability.

The approved PDMMs include:

• Access Bank Plc

• First Bank of Nigeria Ltd

• Stanbic IBTC Bank Ltd

• Citibank Nigeria Ltd

• First City Monument Bank Plc (FCMB)

• Standard Chartered Bank Nigeria Ltd

• Coronation Merchant Bank Ltd

• FSDH Merchant Bank Ltd

• United Bank for Africa Plc (UBA)

• Ecobank Nigeria Ltd

• FBNQuest Merchant Bank Ltd

• Rand Merchant Bank Nigeria Ltd

• Guaranty Trust Bank Ltd (GTBank)

• Zenith Bank Plc

Investors are expected to submit their bids through these PDMMs before the auction date. Successful bidders will make payments on July 30, 2025, which is the official settlement date for this round of bond issuance.

Why This Matters: Implications for Investors and the Economy

The July bond auction offers a valuable opportunity for Nigerians and institutional investors to earn attractive returns in a relatively low-risk environment, especially amid inflationary pressures and fluctuating exchange rates.

Additionally, it plays a crucial role in deepening the domestic debt market, encouraging financial inclusion, and fostering a culture of long-term investment. For the government, this method of fundraising offers a sustainable alternative to excessive external borrowing, while strengthening domestic fiscal capacity.

Conclusion

With interest rates as high as 19.30%, and the government’s track record of regular interest payments and principal redemption, the July 2025 FGN bond auction is expected to attract significant attention from risk-averse investors seeking stable returns.

As Nigeria continues to leverage the domestic capital market to fund its development agenda, instruments like these will remain essential to building investor confidence and fostering a robust financial ecosystem.

For more information on how to participate, investors are encouraged to visit the official DMO website or consult their preferred PDMM.