FG Secures N596.5 Billion in December Bond Auction as Investor Demand Remains Strong

The Federal Government of Nigeria has successfully raised N596.5 billion from its December Federal Government of Nigeria (FGN) bond auction, reinforcing continued investor appetite for government securities despite prevailing macroeconomic pressures.

The auction, conducted by the Debt Management Office (DMO), featured the re-opening of two existing bonds: the FGN August 2030 bond and the FGN June 2032 bond. Both instruments attracted strong demand from domestic investors, including pension funds, asset managers, and other institutional participants.

Although the government initially offered a combined amount of N460 billion across the two tenors, total subscriptions significantly exceeded the offer size. Following the allotment process, the government accepted bids amounting to N596.5 billion, reflecting oversubscription and flexibility in meeting financing needs.

The bonds were allotted at marginal rates of 17.20 percent for the 2030 bond and 17.30 percent for the 2032 bond, broadly aligned with market expectations in the current high-interest-rate environment. The coupon rates on the instruments remain unchanged until maturity.

Market participants view the outcome as an indication that fixed-income securities continue to offer attractive risk-adjusted returns, particularly in an environment characterised by elevated inflation and cautious sentiment across other asset classes. Government bonds remain a preferred option for investors seeking relative stability and predictable income streams.

The December auction represents one of the final domestic borrowing activities of the year and forms part of the government’s broader strategy to fund fiscal obligations while managing its domestic debt profile. Regular bond issuances also support liquidity in the secondary market and provide benchmark yield curves for broader capital market activity.

Analysts note that sustained investor participation in government bond auctions will remain closely tied to inflation trends, monetary policy direction, and broader fiscal discipline. As attention shifts toward the new year, the performance of future bond auctions is expected to reflect evolving expectations around interest rates, economic growth, and government financing requirements.

The successful N596.5 billion raise underscores the continued role of Nigeria’s domestic debt market as a key funding channel for the federal government, even as policymakers balance borrowing needs with long-term debt sustainability considerations.