DMO Offers N600 Billion in 2038 Bond Reopening Auction

The Federal Government is set to raise N1 trillion from investors on Monday, September 14, with N600 billion coming from the reopening of the 15.45% FGN June 2038 bond. This bond, first issued in June 2023, has become a crucial source of borrowing for the government, particularly in 2026.

Currently, about N2.42 trillion of this bond is outstanding, and if the N600 billion is allotted at the upcoming auction, the total could exceed N3 trillion. The DMO's strategy of reopening existing bonds allows for additional fundraising using familiar securities rather than creating new ones.

The September auction is part of the DMO’s revised borrowing program for the third quarter of 2026, as the government increasingly relies on the domestic bond market for financing. Interest rates on government securities are trending lower, indicating a potential for cheaper borrowing rates for the government.