Capital Market
DMO Floats N600bn Reopened Bonds as Yields Hit 22.60%
The Debt Management Office (DMO) has launched a fresh N600 billion bond auction on behalf of the Federal Government, offering investors yields of up to 22.60 per cent amid Nigeria’s persistently high interest rate environment.
The auction, taking place on Monday, features two reopened Federal Government bond instruments with settlement scheduled for May 20, 2026. Both securities will pay interest twice yearly, while investors will receive their principal at maturity.
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Under the offer, the DMO is reopening N300 billion of the 22.60 per cent FGN January 2035 bond and another N300 billion of the 16.2499 per cent FGN April 2037 bond.
The exercise is being handled through a group of Primary Dealer Market Makers, including major financial institutions such as Access Bank, Zenith Bank, and Guaranty Trust Bank.
Each bond unit is priced at N1,000, while the minimum subscription has been pegged at N50.001 million. The securities are fully guaranteed by the Federal Government.
Because the instruments are reopened issues, their coupon rates remain unchanged. Investors whose bids are successful will purchase the bonds based on the yield-to-maturity that clears at the auction, alongside accrued interest.
The reopening strategy is aimed at improving liquidity in already existing bond lines instead of introducing fresh debt instruments into the market.
Analysts said the sharp difference between the yields on the two bonds reflects the unusual inversion currently seen in Nigeria’s fixed-income market, where shorter-dated securities continue to offer stronger returns due to tight monetary conditions.
The bonds also come with several incentives expected to attract institutional investors. They qualify as approved trustee investments and enjoy recognition as government securities under relevant tax laws, allowing pension funds and other qualified investors to benefit from tax exemptions.
In addition, the instruments are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, enabling active secondary market trading and improved price transparency. Commercial banks can also classify the bonds as liquid assets when calculating liquidity ratios.
The latest offering continues the Federal Government’s reliance on reopening existing bond lines to meet domestic funding needs.
Since December 2025, the DMO has repeatedly returned to the market with reopened instruments rather than creating new bond issues. Earlier in January 2026, investor demand pushed total allotments to N1.54 trillion, far above the N900 billion initially offered, with the 22.60 per cent January 2035 bond attracting particularly strong interest.
Subsequent auctions in February and April also featured the same benchmark bond, although borrowing costs eased slightly compared to the earlier peak levels.
The current N600 billion sale marks the fifth consecutive reopening exercise by the DMO since December 2025, further cementing the 22.60 per cent January 2035 instrument as one of the dominant benchmarks in Nigeria’s domestic debt market.
