The Federal Government is returning to one of its most frequently reopened securities as it seeks to raise N1 trillion from investors at Monday’s auction scheduled for September 14.
Of the total amount on offer by the Debt Management Office (DMO), N600 billion will come from a reopening of the 15.45% FGN June 2038 bond, while N400 billion will be raised through a new bond maturing in September 2036.
This means 60% of the amount the government hopes to raise at the auction will come from a security that has been issued several times since its introduction in June 2023. The June 2038 bond has become a key borrowing instrument for the Federal Government, particularly in 2026.
A review of DMO auction data and Nigerian Exchange (NGX) filings shows that roughly N2.42 trillion worth of the bond is already outstanding. If another N600 billion is allotted at Monday’s auction, total issuance could rise above N3 trillion.
The security was first issued in June 2023 as a 15-year Federal Government bond, with an initial offer of just N90 billion from which the DMO eventually allotted N100.64 billion. It was reopened repeatedly between July 2023 and January 2024 before making a significant comeback in the 2026 borrowing programme.
The amounts involved have grown substantially:
- In July 2026, the DMO offered N400 billion and allotted about N354.63 billion. - In August, the offer was raised sharply to N750 billion, and strong demand enabled the DMO to allot about N1.37 trillion through competitive and non-competitive bids. - NGX records after the August supplementary listing showed about N2.42 trillion outstanding.
Reopening an existing bond allows the Federal Government to raise additional funds using a security investors already know, rather than creating a new instrument each time it needs to borrow. The June 2038 bond pays annual interest of 15.45% on its face value and matures on June 21, 2038. However, the actual return investors earn depends on the price paid at auction, making the clearing yield an important gauge of government borrowing costs.
