Nigeria’s October 2025 bond public sale confirmed that investor urge for food for Federal Authorities securities stays strong at the same time as charges pattern decrease.
Knowledge from the Debt Administration Workplace (DMO) revealed that the five-year FGN AUG 2030 bond cleared at 15.83 % in contrast with 16.00 % in September, whereas the seven-year FGN JUN 2032 be aware cleared at 15.85 %, down from 16.20 % a month earlier.
Ordinarily, such a decline in yields may discourage participation, however demand remained strikingly excessive.
The seven-year paper recorded subscriptions price N1.06 trillion in October, barely increased than the N1.03 trillion acquired in September, confirming that traders are keen to bid aggressively for presidency paper even at thinner margins.
The five-year be aware additionally recorded sturdy, if softer, curiosity, with bids totalling N212.66 billion in October in contrast with N231.79 billion in September. The outcomes exhibits the notion of sovereign debt as one of many most secure and most liquid belongings out there.
Heavy demand at decrease charges additionally indicators deep system liquidity and the willingness of traders to just accept diminished returns in trade for stability.
Allotments lower regardless of trillion-naira subscriptions
Though demand was overwhelming, the DMO scaled again on the quantity allotted. In September, the federal government allotted N576.62 billion throughout the 2 devices, however in October, this fell to N313.77 billion, a steep 45.6 % decline.
- The cutback was most pronounced on the seven-year bond. Whereas subscriptions crossed the trillion-naira mark, the DMO accepted solely N225.97 billion in contrast with N488.83 billion within the earlier month. An extra N3 billion was allotted by way of the non-competitive window, however this was marginal when set towards whole bids.
- In contrast, allotments on the five-year be aware remained unchanged at N87.80 billion regardless of weaker subscription ranges. This selective discount exhibits the federal government’s effort to handle its borrowing programme rigorously.
By decreasing allotments at a time of sturdy demand, the DMO successfully saved debt service prices in test whereas nonetheless satisfying a part of market urge for food. The transfer additionally means that the federal government is exercising warning over its rising debt inventory, selecting to not over-leverage even when investor funds are available.
What you must know
In September 2025, the Central Bank of Nigeria (CBN) introduced a discount within the Financial Coverage Price (MPR), which was its first fee lower since 2020. On September 23, the Financial Coverage Committee (MPC) diminished the benchmark MPR from 27.5% to 27%, marking a tentative pivot after two years of aggressive tightening.
The choice got here on the again of sustained disinflation, with headline inflation easing for six consecutive months to 18.02% in September.
Nairametrics noticed that the October outcomes spotlight a important pattern in Nigeria’s home bond market. Demand continues to outstrip provide by a large margin, retaining subscription ranges elevated and making use of downward stress on yields.
Whole subscriptions throughout each tenors rose barely to N1.27 trillion in October from N1.26 trillion in September, as the federal government raised its supply dimension from N200 billion to N260 billion.
The persistence of trillion-naira bids for the seven-year tenor indicators investor confidence in sovereign debt as a dependable retailer of worth amid financial uncertainty. Wanting forward, this mismatch between provide and demand suggests additional yield compression is probably going, particularly if liquidity stays excessive and the federal government maintains its restrained issuance technique.
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