The Federal Government plans to raise N700bn from the domestic bond market in April 2026, extending a gradual reduction in offer size as it continues to navigate elevated borrowing costs.

Details from the April 2026 Federal Government of Nigeria Bond Offer Circular issued by the Debt Management Office showed that the auction is scheduled for April 27, with settlement on April 29.

The issuance will be executed through the re-opening of existing instruments across three maturities, a strategy aimed at improving liquidity in benchmark securities.

The circular indicated that the offer comprises 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 bonds will be issued in units of N1,000, with a minimum subscription of N50.001m, targeting institutional investors such as pension funds, banks, and asset managers.

The DMO also noted that the instruments qualify as liquid assets for banks and enjoy tax exemptions under existing laws, factors that continue to support investor appetite.

A review of recent issuances showed that the April offer represents a further reduction in the government’s monthly borrowing target.

The offer has declined steadily from N900bn in January to N800bn in February, N750bn in March, and now N700bn in April, signalling a measured adjustment rather than a shift in overall strategy.

In March, the government offered a total of N750bn, comprising N250bn in a five-year bond, N200bn in a seven-year bond, and N300bn in a 10-year bond.

The latest adjustment reduces the overall size by N50bn, while also altering the distribution across maturities, with the seven-year component cut significantly.

The coupon structure for the April issuance further highlights the prevailing high-yield environment. While the five-year and seven-year instruments carry rates of about 17.945 per cent and 17.95 per cent respectively, the 10-year bond is priced significantly higher at 22.60 per cent.

This represents a sharp increase compared to similar long-term instruments offered in previous months, reflecting investor demand for higher returns to compensate for risks associated with inflation, exchange rate pressures, and global uncertainties.

Final yields will, however, be determined at the auction, where successful bidders pay based on their yield-to-maturity bids in addition to accrued interest.

The sustained high-interest-rate environment aligns with the tight monetary stance of the Central Bank of Nigeria, which has maintained elevated rates to curb inflation. This, in turn, continues to push up domestic borrowing costs and adds pressure to the government’s debt servicing obligations. (The PUNCH)

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