By George OPARA
The federal government has planned to borrow N1.2 trillion by auctioning previously issued bonds to investors amid current scarcity of cash in the banking system at an auction slated for June 22, 2026.
The development followed an offer circular released on June 15, by the Debt Management Office, (DMO) indicating that
the government will offer ₦600 billion each in a 10- and 20-year bond, with settlement set for June 24, 2026. The issuance forms part of the government’s domestic borrowing programme and comes amid elevated yields in the fixed-income market.
The instruments on offer are the 22.60 percent FGN JAN 2035 bond, a 10-year reopening valued at ₦600 billion, and the 16.2499 percent FGN APR 2037 bond, a 20-year reopening also worth ₦600 billion.
Spear News Nigeria gathered that successful investors will pay a price based on the yield-to-maturity that clears the auction, in addition to any accrued interest on the bonds. Subscriptions are priced at ₦1,000 per unit, with a minimum investment requirement of ₦50.001 million and additional purchases in multiples of ₦1,000. Coupon payments will be made semi-annually, while the principal will be repaid in full at maturity.
The planned ₦1.2 trillion issuance comes at a crucial time when the Central Bank of Nigeria (CBN) is aggressively tightening liquidity through Open Market Operations (OMO), a move that has pushed yields higher across the fixed-income market. Market analysts view the size of the offer as one of the largest single FGN bond auctions in recent months, underscoring the government’s funding needs and prevailing liquidity management measures.
As the 10-year bond comes with a remarkable higher coupon rate of 22.60 percent, the longer-dated 2037 bond offers a lower coupon of 16.2499 percent, reflecting the interest rate environment at the time of its original issuance. Despite the lower coupon, demand for long-term FGN securities has remained strong, particularly from pension fund administrators and insurance firms seeking tax-exempt assets that match their long-term liabilities.
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