DMO Raises N799bn from Bonds, Rejects 49% of Total Bids in Q2
The Debt Management Office (DMO) raised N798.60 billion from Federal Government of Nigeria (FGN) bonds sold to investors across primary market auctions conducted in the second quarter of 2025.
The amount raised was higher than N750 billion in total offers across three primary market auctions. Meanwhile, the total amount raised was 51% of the aggregate subscriptions recorded across its monthly auction, totaling N1.54 trillion in the last three months.
The authority was less aggressive than earlier anticipated, signaling a shift from its usual activities in local debt market borrowing. According to a quarterly review by investment banking firm Parthian Limited, the FGN Bonds space in Q2 2025 was largely driven by bearish sentiment.
Fixed income market investors maintained a cautious stance amid heightened uncertainty around market direction at the start of the quarter. However, robust liquidity in the financial system and disinflation somewhat boosted bargain hunting.
Analysts explained that the lack of clarity contributed to a weak appetite overall, which pushed average yields up 24 basis points (bps) to close at 18.67% in April.
Midway through the quarter, the DMO issued a 7-year Sukuk at 19.75%, which prompted few sell-offs on existing Sukuk holdings, as investors sought to free up liquidity for the new issuance.
Consequently, bearish sentiments persisted in the period as investors sought attractive deals. By late May, offers improved on the mid-dated bonds, with cherry-picking across the board emerging.
As June commenced, the DMO announced the continued reissuance of the April 2029 bond, as well as the issuance of the new 7-year bond, prompting investors to position ahead of the auction.
Following the auction, where the newly issued 17.95% June 2032s were tightly allotted, analysts at Parthian Limited said they saw strong bearish sentiments, with limited offers to match. Ultimately, post auction, June took a somewhat different trajectory as a result of exceptional demand at the Bond auction (N602bn over the N100bn offered).
The unmet demand trickles into the secondary market, ample liquidity in the system, and improving economic sentiments, particularly the stabilization in inflation, all contributing to average yields declining by 63 bps in June, closing the quarter at 17.97%.
The yields declined by an average of about 70 bps across the curve in the last three months compared with the first quarter of 2025 record.
The DMO floated a total of N750 billion at the bond auctions for the quarter across the April 2029s, June 2032s, and May 2033s; c. N798.6 billion was sold through the quarter versus N1.54 trillion subscription. The stop rates on the offer closed the quarter at 17.75% and 17.95% on the Apr 2029s and Jun 2032s, respectively. First Holdco Falls as Investors Weigh Bank’s Unremediated Exposures
