Nigeria Plans N1.2 Trillion Domestic Bond Issuance for Q2 2025
The Federal Government of Nigeria has announced plans to raise between N900 billion and N1.2 trillion through domestic bonds in the second quarter (Q2) of 2025. This marks a significant reduction from the N1.8 trillion target set for the first quarter (Q1) of the year, according to the latest bond issuance calendar released by the Debt Management Office (DMO).
Revised Bond Strategy Amid Fiscal Challenges
The adjustment comes as Nigeria navigates a challenging fiscal environment characterized by high inflation, declining oil revenues, and a record budget deficit of N13.08 trillion (3.87% of GDP). The DMO’s calendar outlines three bond auctions scheduled for April 28, May 26, and June 23, 2025, with two bonds offered each month.
Key Differences Between Q1 and Q2 Issuance
While Q1 2025 featured three bonds per month with a potential N1.8 trillion target, the Q2 calendar shows a more conservative approach:
- Monthly Offer Range: N300 billion to N400 billion
- Total Q2 Target: N900 billion to N1.2 trillion
- Bond Types: Mix of re-opened bonds and new issuances
Detailed Breakdown of Q2 Offerings
The April and May auctions will re-open existing bonds:
- 19.30% FGN APR 2029 (4-year remaining tenor in April)
- 19.89% FGN MAY 2033 (6-year 1 month remaining in April)
June will introduce two new instruments:
- FGN JAN 2030 (5-year tenor)
- FGN JAN 2032 (7-year tenor)
Market Context and Investor Considerations
The reduced issuance volume reflects several economic factors:
- Persistent high inflation (24.23% in March 2025)
- CBN benchmark interest rate at 27.5%
- Continued investor appetite for high-yield instruments
The bonds maintain several attractive features:
- Tax-exempt status for pension and institutional funds
- Liquid asset classification for bank liquidity ratios
- Listed on NGX and FMDQ OTC Securities Exchange
This strategic adjustment suggests the DMO is balancing fiscal needs with market stability concerns while maintaining regular auction frequency to support secondary market liquidity.
Full credit to the original publisher: Nairametrics