The Debt Management Office (DMO) on behalf of the Federal Government of Nigeria (FGN) will conduct a bond worth N150 billion at the Primary Market Auction (PMA) on Wednesday, October 20, according to a circular by the DMO.
A breakdown of the bond offer shows that N50 billion will be offered at a 12.50 interest rate across January 2026 (10-yr re-opening), N50 billion at 16.25 percent across FGN April 2037 (20-yr re-opening) and N50 billion 12.98 percent across March 2050 (30-yr re-opening).
On the status of the bond, the DMO said it qualifies as securities in which trustees can invest under the Trustee Investment Act. It also qualifies as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds among other investors.
It is listed on the Nigerian Exchange Group Plc (NGX) and FMDQ OTC Securities Exchange, and all FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks.
On the interest rate, the office said for re-openings of previously issued bonds, (where the coupon is already set), successful bidders would pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument.
“FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria,” the DMO said.
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Analysts at Afrinvest Securities Limited expect secondary market performance to be determined by stop rates from the bond auction and as investors react to the Consumer Price Index (CPI) and inflation report for September released last Friday by the National Bureau of Statistics (NBS) which reported contraction of 38bps (printed at 16.63%).
The analysts advised investors to trade cautiously and take advantage of instruments that advanced on the week.
A report by the investment firm stated that the FGN Bonds secondary market performance was mixed last week, as average yield on secondary market bonds fell marginally by 1bp W-o-W to settle at 11.33 percent (from 11.34% the previous week).
In more detail, the 17-Mar-27 maturity witnessed the most demand, contracting 31bps week-on-week but was offset by sell-offs on the 22-Jan-26 and 23-Mar-25 maturities which expanded 20bps and 10bps W-o-W respectively.
At the Nigerian Treasury Bills market, the analysts anticipate sustained demand levels in the secondary market, as investors continue seeking to match unfilled bids supported by stable liquidity levels (which stood at N118.9bn long as at Friday). “We advise investors to position in relatively attractive maturities along the curve,” the analysts advise.
On Wednesday, the Central Bank of Nigeria (CBN) conducted a PMA where a total of N121.7 billion worth of NT-Bills was offered across the 91- (N5.2bn), 182- (N8.8bn), and 364-day (N107.6bn) tenors. The offer maintained a strong level of demand as its total subscription ratio stood at 4.1x (N493.0bn total subscribed). In addition, stop rates on all offers were maintained, save for the long-term instrument which moderated 25bps to 7.25 percent (from 7.50% at the last auction). The long-term offer recorded significant demand from investors with a subscription ratio of 4.5x (N480.1bn subscribed).
