In a move that underscores shifting market dynamics, the Debt Management Office (DMO) has reduced the spot yields on Federal Government of Nigeria (FGN) bonds at its most recent primary auction. According to auction details released Monday, the DMO aimed to raise ₦300 billion through the sale of local bonds but concluded the session with ₦295.98 billion in subscriptions across two separate maturities.
A report by AAG Capital Limited noted that investor appetite leaned strongly towards longer-dated instruments. Specifically, the FGN bond maturing in May 2033 attracted significant interest, recording a subscription rate twice the amount on offer. The 10-year paper cleared at a spot rate of 19.85%, reflecting a decline of 14 basis points from the previous rate of 19.99%.
Conversely, the shorter-term FGN bond due in April 2029 witnessed tepid demand. It recorded a bid-to-cover ratio of just 0.16x, signaling weak investor enthusiasm. The spot rate on the 5-year note dipped slightly by 2 basis points to 18.98%.
Market analysts observed that trading in the secondary bond market remained muted, as investor focus remained firmly on the auction results. The government had re-opened two existing bond issues—APR-2029 and MAY-2033—offering a combined value of ₦300 billion in a bid to manage domestic debt financing more efficiently.
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