FG targets N600bn from May bond auction

The Debt Management Office (DMO), on behalf of the Federal Government, has announced a fresh N600 billion Federal Government of Nigeria (FGN) bond auction scheduled for May 2026. The bond issuance is part of the government’s strategy to finance fiscal obligations, deepen the domestic capital market, and attract institutional investors amid sustained demand for fixed-income […]

The Debt Management Office (DMO), on behalf of the Federal Government, has announced a fresh N600 billion Federal Government of Nigeria (FGN) bond auction scheduled for May 2026.

The bond issuance is part of the government’s strategy to finance fiscal obligations, deepen the domestic capital market, and attract institutional investors amid sustained demand for fixed-income securities.

According to the offer circular issued by the DMO on Tuesday, the auction is scheduled to hold on May 18, 2026, while successful subscriptions will be settled on May 20, 2026.

The DMO disclosed that the offer consists of two re-opened FGN bond instruments valued at N300 billion each: N300 billion 22.60% FGN January 2035 10-year re-opening bond and N300 billion 16.2499% FGN April 2037 20-year re-opening bond.

The bonds are priced at N1,000 per unit, with a minimum subscription of N50,001,000 and additional subscriptions allowed in multiples of N1,000.

According to the agency, both instruments are re-openings of previously issued bonds, meaning the coupon rates have already been fixed.

Interest payments will be made semi-annually, while the principal will be repaid through a bullet repayment structure at maturity. Successful bidders will pay based on the yield-to-maturity that clears the auction, in addition to accrued interest.

The DMO also stated that the bonds are backed by the full faith and credit of the Federal Government of Nigeria.

The latest issuance highlights the Federal Government’s continued reliance on the domestic debt market to finance budget deficits, refinance maturing obligations, and support infrastructure development while reducing exposure to foreign exchange risks.

Compared to April 2026, the government reduced the size of the bond offer by N100 billion.

In April, the DMO offered N700 billion across three instruments: comprising N300 billion 10-year 2035 bond; N100 billion 7-year 2032 bond and N300 billion 5-year 2030 bond

The reduction to N600 billion in May suggests a more measured borrowing approach, likely influenced by improved liquidity conditions driven by rising oil prices and efforts to manage increasing debt service costs.

The DMO noted that the bonds qualify as trustee investment securities under the Trustee Investment Act and as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA).

 

Pension funds and other eligible institutional investors may also benefit from tax exemptions attached to the instruments.

 

The bonds are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange for secondary market trading, while also qualifying as liquid assets for banks in liquidity ratio calculations.

 

Interested investors were advised to submit applications through approved Primary Dealer Market Makers (PDMMs), including Access Bank, First Bank of Nigeria, Stanbic IBTC Bank, Guaranty Trust Bank, United Bank for Africa, Zenith Bank, Ecobank Nigeria, and Standard Chartered Bank Nigeria.