The Debt Management Office (DMO) has released the results of its latest Federal Government of Nigeria (FGN) bond auction for March 2025, with a total allotment of N4.686 billion for the 5-year bond and N266.452 billion for the 9-year bond.
The auction revealed a strong investor appetite for the 9-year tenor, which cleared at 19.99%, while the 5-year bond saw significantly weaker demand.
The bond auction held on March 24, 2025, for the re-opening of the 19.30% FGN APR 2029 (5-year bond) and the 19.89% FGN MAY 2033 (9-year bond).
The auction witnessed strong investor interest, particularly for the longer-tenor bond.
This was contained in a statement posted on the agency’s website on Monday.
Auction Results Overview
Key Highlights from the Auction
- The 5-year bond (19.30% FGN APR 2029) saw a relatively low level of subscription, attracting bids worth N59.069 billion against the N200 billion offered. Ultimately, only N4.686 billion was allotted to successful bidders.
- The 9-year bond (19.89% FGN MAY 2033) was oversubscribed, with total bids reaching N471.241 billion against the N100 billion offered. The DMO allotted N266.452 billion to successful bidders, demonstrating strong investor appetite for long-term government securities.
- Non-competitive allotments were significant, with N91.300 billion allocated for the 5-year bond and N61.150 billion for the 9-year bond.
- The marginal rates settled at 19.00% for the 5-year bond and 19.99% for the 9-year bond, reflecting market expectations on interest rate trends.
DMO’s Position on Coupon Rates
Despite the auction results, the DMO reaffirmed that the original coupon rates for both bonds will be maintained:
- 19.30% for the 19.30% FGN APR 2029 bond
- 19.89% for the 19.89% FGN MAY 2033 bond
Market Implications
The strong demand for the 9-year bond suggests investors are favoring longer-dated instruments, possibly in anticipation of stable or declining interest rates in the medium term. Meanwhile, the weaker demand for the 5-year bond may indicate caution regarding shorter-term yields or liquidity concerns in the fixed-income market.
Analysts suggest that the results reflect broader macroeconomic trends, including inflationary pressures and monetary policy expectations. The marginal rates indicate that investors are pricing in potential risks while seeking attractive yields.
The March 2025 FGN bond auction showcased mixed investor sentiment, with robust interest in longer-tenor bonds but tepid participation in shorter-term securities.
