Nigeria Auctions ₦1.75 Trillion in Bonds Amid Rate Shift

On October 19, Nigeria is auctioning ₦1.75 trillion in the domestic debt market, with settlement scheduled for October 21. The Debt Management Office is offering ₦500 billion of the 19% FGN February 2034 bond, ₦800 billion of the 16.79% FGN September 2036 bond, and ₦450 billion of the 15.45% FGN June 2038 bond.

This offer is significantly larger than the ₦1 trillion offered at the previous auction in September. The auction will assess how investors price long-term government debt amid a shifting interest-rate environment.

Although the 19% coupon is notable, actual returns may differ as the bonds are reopenings, meaning their coupon rates were set at issuance. Investors will bid for yields, which could result in trading below the coupon rate.

The DMO has indicated strong demand for its debt, with previous auctions showing substantial subscriptions. The current benchmark monetary policy rate is 23%, and headline inflation was recorded at 14.63% in September.