The Federal Government plans to raise between N900bn and N1.2tn from the domestic bond market in the second quarter of 2025, a sharp drop from the N1.8tn targeted in the first quarter of the year.

This is according to the FGN Bond Issuance Calendar for Q2 2025, newly released by the Debt Management Office.

The reduced target comes as the government faces a tough fiscal environment characterised by weak oil receipts, elevated inflation, and a record N13.08tn budget deficit, representing 3.87 per cent of the country’s Gross Domestic Product.

According to the calendar, three auctions will be held on April 28, May 26, and June 23, with two bonds to be offered per month.

The DMO plans to raise between N300bn and N400bn at each auction, combining reopened bonds and new issuances.

In contrast, the Q1 2025 calendar featured three bonds per auction, targeting between N450bn and N600bn monthly and up to N1.8tn for the quarter.

Bonds offered included the 19.30 per cent FGN APR 2029, the 18.50 per cent  FGN FEB 2031, and a debut 10-year FGN JAN 2035 bond. Each was offered within a range of N150bn to N200bn.

For Q2, the government has narrowed its auction line-up to two bonds per month. In April and May, the DMO will reopen the 19.30 per cent FGN APR 2029 and 19.89 per cent FGN MAY 2033 bonds.

In June, it will introduce two new issues—the FGN JAN 2030 and FGN JAN 2032—with original tenors of five and seven years, respectively.

In April, the APR 2029 bond will have a remaining tenor of four years, while the MAY 2033 bond will have six years and one month left.

By May, those terms shorten to three years and eleven months, and six years, respectively. Both bonds retain their original coupon rates of 19.30 per cent and 19.89 per cent.

The DMO has also released details for its April auction. The Federal Government plans to raise N350bn through the reopening of the APR 2029 and MAY 2033 bonds.

According to the circular, N200bn will be offered in the APR 2029 and N150bn in the MAY 2033. The auction will be held on Monday, April 28, with settlement on Wednesday, April 30.

Each unit of the bond is priced at N1,000, with a minimum subscription of N50,001,000, and in multiples of N1,000 thereafter. Although the coupon rates are fixed, successful bidders will pay a price based on the yield-to-maturity and accrued interest up to the settlement date.

The bonds pay interest semi-annually, while the principal is repaid in full at maturity. They qualify as securities under the Trustee Investment Act, are tax-exempt under the Company Income Tax Act and Personal Income Tax Act, and count as liquid assets for calculating banks’ liquidity ratios. They are also listed on the Nigerian Exchange and FMDQ OTC Securities Exchange.

The DMO appears to be taking a more measured approach in Q2, potentially in response to sustained demand from institutional investors and evolving monetary conditions.

With inflation at 24.23 per cent in March and the Monetary Policy Rate at 27.5 per cent, high-yield government bonds remain attractive.

The reduced issuance may also reflect an attempt to manage borrowing costs amid tighter liquidity and broader fiscal pressures.