• 28 May, 2025
• FAITH MIMDOO KEGH
• No comment

Investors Prefer Longer-Term Debt in Recent Bond Auction.

At the May 2025 Federal Government of Nigeria bond auction, investors showed a clear preference for longer-term bonds. According to the Debt Management Office (DMO), th

ere was strong demand for the 19.89% FGN bond maturing in May 2033, while interest in the 19.30% FGN bond due in April 2029 was comparatively low.

During the auction held on May 26, 2025, the DMO offered N100 billion for the five-year bond and N200 billion for the nine-year bond. However, investors overwhelmingly favored the longer maturity.

The nine-year bond attracted a total subscription of N419.96 billion from 141 bids, with N295.99 billion allocated to 86 successful bidders. In contrast, the five-year bond received only N16.44 billion in bids from 19 investors, with N4.70 billion allotted to 11 bidders.

The marginal rate settled at 18.98% for the five-year bond and 19.85% for the nine-year bond. Despite the bidding range for the shorter-term bond being 17% to 20%, demand remained low, likely due to concerns about inflation and near-term fiscal challenges.

Bids for the nine-year bond ranged more widely, from 15% to 21.43%, reflecting higher investor confidence in longer-term yields. The original coupon rates of 19.30% (2029 bond) and 19.89% (2033 bond) will be maintained.

Market analysts suggest that the preference for longer-dated bonds stems from investors seeking better yields and portfolio stability amid expectations of ongoing monetary tightening and inflation pressures.

The bonds will be settled on May 28, 2025.

FAITH MIMDOO KEGH

Manager – Oversees the daily operations, editorial planning, and strategic direction of the platform. A graduate with a solid academic foundation in media and communication, Faith brings a wealth of experience to the TokinPoint.

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