Strong investor demand for federal government securities persisted in June as Nigeria’s Debt Management Office (DMO) attracted subscriptions of more than N1.4 trillion in its latest bond auction, allowing the government to raise N1.22 trillion and exceed its initial funding target.
According to auction results released by the DMO, investors submitted bids worth N1.413 trillion against a total offer of N1.2 trillion, producing an oversubscription of N213.5 billion.
The government had offered N600 billion each in two reopened benchmark instruments, including the 22.60 per cent FGN January 2035 bond and the 16.2499 per cent FGN April 2037 bond.
Rather than limiting allotments to the amount initially offered, the DMO accepted additional subscriptions and ultimately raised N1.2219 trillion, slightly above the advertised offer size.
Demand remains strong despite lower yields
The auction outcome signals that investors remain willing to commit significant capital to government debt even as marginal rates continue to settle below the coupon rates attached to the instruments.
The 22.60 per cent FGN January 2035 bond attracted subscriptions totaling N705.22 billion from 179 bids. The DMO accepted 135 bids and allotted N600.90 billion. The instrument cleared at a marginal rate of 18.34 per cent.
Meanwhile, the 16.2499 per cent FGN April 2037 bond recorded subscriptions of N708.27 billion from 215 bids. The agency accepted 181 bids and allotted N621 billion, with the bond clearing at a marginal rate of 18.35 per cent.
The latest auction forms part of the federal government’s domestic borrowing programme as authorities seek to finance budgetary requirements while managing public debt obligations.
By successfully raising more than N1.2 trillion in a single auction, the government has showcased its ability to mobilise substantial domestic capital without encountering significant resistance from investors.
The result also reflects the growing capacity of Nigeria’s domestic debt market to absorb large issuances, supported by expanding institutional participation and the continued growth of pension assets.
The demand pattern was particularly notable given the size of the offering. Raising over N1.2 trillion in a single auction represents one of the larger domestic debt issuances in recent months and provides a gauge of liquidity conditions within the financial system.
The DMO confirmed that the original coupon rates of 22.60 per cent for the January 2035 bond and 16.2499 per cent for the April 2037 bond will remain unchanged.
