Investors stake N397.9bn in April FGN bond auction as demand shifts to long-term paper

BY MOTOLANI OSENI

The Debt Management Office (DMO) has raised a total of N397.9 billion from its April 2025 Federal Government of Nigeria (FGN) bond auction, with strong investor demand concentrated on longer-term instruments.

The auction, held on April 28, featured re-openings of the 19.30% FGN APR 2029 5-year bond and the 19.89% FGN MAY 2033 9-year bond, with settlement slated for April 30.

Investor appetite skewed heavily toward the 2033 bond, which drew over N452 billion in bids against the N150 billion offered.

The DMO eventually allotted N376.8 billion competitively and an additional N73 billion through non-competitive bids, reflecting deep market confidence in longer-duration instruments amid macroeconomic uncertainty.

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In contrast, demand for the shorter 2029 bond was modest. Out of N200 billion offered, only N21.1 billion was allotted competitively, while N50 billion was taken up via non-competitive bids, bringing total allotments for that tranche to N71.1 billion. Despite the subdued interest, both issues cleared at marginal rates of 19.00% and 19.99% respectively, with the original coupon rates of 19.30% and 19.89% maintained.

Analysts say the oversubscription of the 2033 issue signals a strategic shift by investors favouring longer-term yields in anticipation of potential monetary easing or as a hedge against inflation. The results also highlight continued investor trust in the FGN bond market as a stable avenue for returns.

Earlier in April, the DMO also successfully allotted N4.34 billion in FGN Savings Bonds, reinforcing the momentum in the government’s domestic borrowing programme and its appeal to both retail and institutional investors.