The Federal Government is returning to one of its most frequently issued bonds as it looks to raise another N1 trillion from investors on Monday, September 14.
Of the N1 trillion being offered by the Debt Management Office (DMO), N600 billion will come from the reopening of the 15.45% FGN June 2038 bond, while another N400 billion will be raised through a new bond maturing in September 2036.
This means 60% of the money the government hopes to raise at Monday’s auction will come from a bond that has already been issued several times since it was introduced in June 2023.
The June 2038 bond has become an important source of borrowing for the Federal Government, particularly in 2026.
Nairametrics’ review of DMO auction data and Nigerian Exchange (NGX) filings shows that about N2.42 trillion worth of the bond is already outstanding.
If another N600 billion is allotted at Monday’s auction, the total value issued could rise above N3 trillion.
The 15.45% FGN June 2038 bond was first issued in June 2023 as a 15-year Federal Government bond.
The amounts involved have also become significantly larger.
Monday’s N600 billion offer therefore represents another major addition to the bond.
Reopening an existing bond allows the Federal Government to raise additional money using a security that investors are already familiar with.
Instead of creating a completely new bond every time it needs to borrow, the DMO can sell additional units of an existing bond.
For example, the July 2026 auction cleared at a yield of 18.40%, while the August auction cleared lower at 17.79%
The September bond auction comes as interest rates on government securities have started trending lower.
A lower yield would mean the Federal Government is gradually borrowing at cheaper rates, while a higher yield would suggest investors are still demanding greater returns to lend money to the government for longer periods.
The September auction forms part of the DMO’s revised borrowing programme for the third quarter of 2026, with the government increasingly relying on the domestic bond market to meet its financing needs.
What started as a relatively modest N90 billion offer in June 2023 has grown into a bond with about N2.42 trillion currently outstanding, and another successful N600 billion issuance could take its cumulative size beyond the N3 trillion mark.
