FG Moves to Borrow N700bn via Domestic Bond Market
- The DMO is making a move to raise N700 billion through FGN bonds to finance budget needs
- The auction includes re-openings of 2030, 2032, and 2035 bonds, with the largest share (N300bn)
- Analysts say the high coupon rates reflect inflation and interest rate expectations
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Debt Management Office (DMO) is set to raise N700 billion through Federal Government of Nigeria (FGN) bonds as part of efforts to finance budget obligations and manage the country’s rising public debt profile.
The planned issuance underscores the federal government’s continued reliance on the domestic debt market to plug fiscal gaps amid constrained revenues and persistent expenditure pressures.
Source: Getty Images
Details from the offer circular issued to Primary Dealer Market Makers (PDMMs) show that the auction, scheduled for Monday, April 27, 2026, will comprise a mix of medium- to long-term instruments through the re-opening of existing bonds.
DMO bond issuance plan
A breakdown of the offer indicates that N300 billion will be raised from the 17.945% FGN AUG 2030 bond, a five-year re-opening.
Another N100 billion is expected from the 17.95% FGN JUN 2032 bond, which has a seven-year tenor.
The remaining N300 billion will be sourced from the 22.60% FGN JAN 2035 bond, a 10-year re-opening.
Offer details
Under the terms of the offer, successful bidders will pay a price corresponding to the yield-to-maturity that clears the auction, in addition to any accrued interest on the bonds.
The instruments are priced at N1,000 per unit, with a minimum subscription of N50.001 million and additional investments required in multiples of N1,000.
Interest payments will be made semiannually, while the principal will be repaid in full at maturity, providing investors with predictable income streams over the life of the bonds.
Source: Getty Images
Market outlook
Analysts said the relatively high coupon rates on the longer-tenor instruments reflect prevailing market conditions, including inflation expectations and interest rate dynamics, Leadership reports.
They added that the government continues to balance borrowing costs with refinancing and liquidity risks as it deepens its domestic debt strategy.
FG repays China, others debts, spends over N2trn
Legit.ng earlier reported that Nigeria’s debt service obligations surged in the final quarter of 2025, with total domestic debt service rising to N2.28 trillion, while external debt service payments stood at $1.80 billion.
The figures captured in the Debt Management Office public debt report released on Monday, April 13, revealed mounting fiscal pressures on the government, as interest payments continued to dominate debt servicing costs across both domestic and external obligations.
Domestic data shows that interest payments alone accounted for N2.17 trillion between October and December, representing over 95% of total domestic debt service. In contrast, principal repayments were significantly lower at N108.88 billion.
A breakdown indicates that FGN Naira Bonds remained the largest cost driver, with N1.32 trillion in interest payments during the quarter.
Source: Legit.ng
