The Debt Management Office (DMO) has announced that it could only raise N295.98 billion from its May 2025 Federal Government of Nigeria (FGN) bond auction.

According to the result published on the DMO website, investors showed a preference for longer term bonds as the five-year FGN bonds maturing in April 2029 experienced weak demand and were undersubscribed by as much as 83 per cent, while the nine-year FGN bond maturing in May 2033 was oversubscribed.

The auction, conducted on May 26, 2025, reopened two instruments: the 19.30 per cent FGN APR 2029 (5-Year Bond) and the 19.89 per cent FGN MAY 2033 (9-Year Bond).

From an offer size of N100 billion, the five-year bond attracted just N16.44 billion in total bids, resulting in an under-subscription rate of 83.56 per cent. This is the same trend from April 2025, when the same bond, then offered at N200 billion, attracted N43.79 billion in bids.

In terms of allotment, only N4.71 billion was issued to investors in May, compared to N21.13 billion the previous month. The number of bids also declined sharply, from 35 bids in April to 19 bids in May, of which just 11 bids were successful. This lack of demand came amid a marginal reduction in yield.

The marginal rate dropped slightly to 18.98 per cent in May from 19.00 per cent in April. With its maturity set for April 17, 2029, the bond now has three years and 11 months left to maturity.

In contrast, the nine-year FGN May 2033 bond continued to enjoy strong patronage. Although the marginal rate was also cut down slightly from 19.99 per cent in April to 19.85 per cent in May, the instrument recorded N419.96 billion in subscriptions against an offer of N200 billion, a sign of continued confidence in longer-dated sovereign debt.

The allotment for the nine-year bond in May stood at N295.99 billion, lower than April’s N376.77 billion, despite a higher offer size. The number of total bids also dipped from 189 in April to 141 in May, with 86 successful bids recorded. The bid range remained aggressive, between 15.00 per cent and 21.43 per cent, only marginally below the previous month’s high of 21.48 per cent, showing that investor appetite remains resilient. With a maturity date of May 15, 2033, the bond offers eight years to maturity, and investors appear willing to lock in yields over the long term.