The Debt Management Office (DMO) has announced plans to raise a combined N1.2 trillion through the reopening of two Federal Government of Nigeria (FGN) Bonds at an auction scheduled for Sunday, June 22, 2026.
In an offer circular published on Monday, June 15, the DMO stated that N600 billion will be offered in the **22.60% FGN JAN 2035** bond (a 10-year re-opening) and another N600 billion in the **16.2499% FGN APR 2037** bond (a 20-year re-opening). Settlement for successful bids is set for Wednesday, June 24, 2026.
The auction forms part of the Federal Government's domestic borrowing strategy to fund budgetary obligations and manage public debt. Subscriptions are priced at N1,000 per unit, with a minimum investment of N50,001,000 and multiples of N1,000 thereafter. Interest payments will be made semi-annually, with principal repaid in full at maturity.
The issuance comes at a time when the Central Bank of Nigeria is conducting aggressive liquidity tightening through Open Market Operations (OMO), which has triggered a significant rise in yields across the fixed income market. The N1.2 trillion offer is one of the largest single FGN Bond auction sizes seen in recent months, signalling further liquidity absorption.
The 10-year 22.60% FGN JAN 2035 bond carries a significantly higher coupon than the 20-year 16.2499% FGN APR 2037, reflecting the rate environment prevailing at the time each instrument was originally issued. The lower coupon on the longer-dated bond means successful bidders are likely to price it at a discount.
FGN Bonds are backed by the full faith and credit of the Federal Government, making them among the safest domestic investment instruments available. They are listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange, providing secondary market liquidity. The bonds qualify as liquid assets for banks' liquidity ratio calculations and are exempt from certain taxes for pension funds and qualifying investors under the Companies Income Tax Act (CITA) and the Personal Income Tax Act (PITA). They also qualify as securities in which trustees may invest under the Trustee Investment Act.
Under the auction system, pricing reflects investor demand rather than fixed rates, with allocations made at the yield-to-maturity that clears the volume on offer. Market participants will be watching the June 22 auction closely to gauge yield direction, particularly on the longer end of Nigeria's sovereign yield curve. Investor appetite for longer-dated FGN paper has been consistently robust in previous sessions, supported by pension funds and insurance companies seeking duration-matched, tax-exempt instruments.
