DMO Doubles August Bond Offer to N240bn as Yields Reprice

Samuel Mobolaji

Nigeria’s Debt Management Office (DMO) has doubled the size of its local bond offering for August, raising the target to between N160 billion and N240 billion, in a move that reverses months of tight supply in the primary market.

In a circular, the DMO said the auction, scheduled for August 25, will feature a new five-year FGN bond and the reopening of a six-year paper, each valued between N80 billion and N120 billion. The larger offer replaces the previously scheduled April 2029 reopening with a fresh August 2030 instrument.

The adjustment comes amid strong investor appetite for naira assets, which had driven yields lower in recent weeks. Heavy bargain hunting in the secondary market had dragged benchmark yields below 17 per cent, supported by disinflation and improving macroeconomic indicators.

At July’s auction, the DMO offered two reopenings, a 3-year 9-month paper and a 6-year 11-month paper — each worth N40 billion. Analysts said the August upsize signals government’s intent to deepen market liquidity and diversify funding sources.

However, traders reported that market sentiment turned bearish after the revised calendar was released, with yields repricing higher across the curve by midday on Friday.

Nigeria’s inflation slowed for the fourth straight month in July, easing to 21.88 per cent year-on-year from 22.22 per cent in June, driven largely by base effects.

Monthly, however, inflation edged up by 31 bps to 1.99 per cent, reflecting renewed price pressures.