LA SUITE APRÈS LA PUBLICITÉ

The Debt Management Office – DMO has officially announced a fresh N600 billion Federal Government of Nigeria – FGN bond auction scheduled for May 18, 2026.

This issuance is a strategic move to finance fiscal obligations and support infrastructure development while minimizing reliance on foreign currency debt. The offer is divided equally into two re-opened instruments: a 10-year bond maturing in January 2035 with a 22.60% coupon, and a 20-year bond maturing in April 2037 with a 16.2499% coupon.

This calibrated approach follows a N100 billion reduction from the previous month’s offer, signaling a shift in borrowing strategy amid rising oil prices and improved liquidity.

Investors looking to participate must navigate a minimum subscription threshold of N50,001,000, with additional investments permitted in multiples of N1,000. Because these are re-openings of existing series, the coupon rates are fixed, but successful bidders will pay a price determined by the yield-to-maturity that clears the auction, plus any accrued interest.

The bonds utilize a bullet repayment structure, meaning the full principal will be paid at maturity, while interest payments are distributed semi-annually. Backed by the full faith and credit of the Federal Government, these securities represent a low-risk cornerstone for domestic portfolios.

The May 2026 auction carries significant regulatory benefits, making it an attractive prospect for institutional players. These bonds qualify as liquid assets for banks’ liquidity ratio calculations and are recognized as trustee investment securities. Furthermore, they offer notable tax incentives under the Company Income Tax Act – CITA and Personal Income Tax Act (PITA), providing exemptions that are particularly beneficial for pension funds and institutional investors.

To ensure liquidity beyond the auction, the bonds will be listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange for secondary market trading.

Interested parties are required to submit their applications through authorized Primary Dealer Market Makers – PDMMs, which include major financial institutions like Access Bank, Zenith Bank, and Standard Chartered.

Settlement for successful subscriptions is slated for May 20, 2026. By focusing on the domestic capital market, the FGN aims to deepen local financial systems while managing the costs of debt servicing.

This issuance underscores the government’s ongoing effort to balance budget deficit funding with a sustainable debt profile in a fluctuating economic landscape.