FG cuts monthly bond offer to N700bn

The Federal Government plans to raise N700bn from the domestic bond market this month, continuing a steady reduction in its monthly borrowing target as it contends with elevated debt costs.

The Debt Management Office disclosed the plan in its April 2026 Federal Government of Nigeria Bond Offer Circular, with the auction scheduled for April 27 and settlement on April 29.

The offer will be executed through the re-opening of three existing instruments: N300bn of the 17.945 per cent FGN August 2030 bond, N100bn of the 17.95 per cent FGN June 2032 bond, and N300bn of the 22.60 per cent FGN January 2035 bond. The re-opening strategy is designed to improve liquidity in benchmark securities.

The bonds will be issued in units of N1,000 with a minimum subscription of N50.001m, targeting institutional investors including pension funds, banks, and asset managers. The DMO noted that the instruments qualify as liquid assets for banks and are exempt from tax under existing laws, factors that continue to support investor appetite.

The April offer marks the fourth consecutive monthly decline in the government’s domestic borrowing target, falling from N900bn in January to N800bn in February, N750bn in March, and now N700bn.

The reduction of N50bn from March’s offer is accompanied by a significant cut in the seven-year component of the issuance.

The coupon structure reflects a high-yield environment driven by tight monetary conditions. While the five-year and seven-year instruments carry rates of approximately 17.945 per cent and 17.95 per cent respectively, the 10-year bond commands a sharply higher coupon of 22.60 per cent, reflecting investor demand for greater returns to offset risks tied to inflation, exchange rate pressures, and global uncertainties.

Final yields will nonetheless be determined at auction, where successful bidders pay based on yield-to-maturity bids plus accrued interest.

The borrowing environment remains strained. The Central Bank of Nigeria has maintained elevated interest rates to curb inflation, which continues to drive up the government’s domestic borrowing costs.

Nigeria’s total debt service rose to approximately N16tn in 2025, a jump of N2.98tn or 22.9 per cent from the N13.02tn recorded in 2024, as debt servicing claims an increasingly large share of government revenue.