₦airaland Forum

Rate and amount allotted for the 1 year increased

Progress and long may it continue

NSEstudent:
May 15 2026 FGSB coupon paid uncharacteristically on due date.

Next NTBills Primary Auction is Wednesday 20th May.

heavenisreal18:
Okay. till when Pls

And the results are below. Reduction in both amounts allotted and marginal rates

skydiver01:
No, it does not mean one can get 22.6%. The rate one gets is reflective of the bond's price in the secondary market. My guess is most likely in the range 16.5%-17.75%

No, it does not mean one can get 22.6%. The rate one gets is reflective of the bond's price in the secondary market. My guess is most likely in the range 16.5%-17.75%

Noted. Merci Beaucoup🙏

along with allotted amounts being reduced
Nevertheless, N2.6 trillion subscription for the one year is quite something... Besides it being 5 times oversubscribed, it makes one wonder why the N2.6 trillion is not prepared to be invested in the real economy... 🥹

Odunharry:
Rate drop again..

Today, using by the bi-weekly schedule. The last one was on 25th March

kaceei:
Please when is the next Treasury Bills primary auction?

Once again, the CBN has continued to reduce the amounts allocated whilst also reducing the rates at the long end (not many successful bids as a result). Potentially implying TB rates may continue to trend downwards

skydiver01:
Will be interesting to see how today's auction goes given the global bond market development induced by the Israel-Iran War.

Will be interesting to see how today's auction goes given the global bond market development induced by the Israel-Iran War.

skydiver01:
Unusually scheduled late but voila... the March FGN Primary Bond Auction Circular is out

Unusually scheduled late but voila... the March FGN Primary Bond Auction Circular is out

skydiver01:
No, I don't have a calendar. I simply check the DMO's website for their monthly bond auction circulars here https://www.dmo.gov.ng/fgn-bonds/bonds-offer-circular

I noticed years ago there is usually one every month. But I have not seen an auction circular for this month listed. There is still another week to go so there might be one next week. I do think its unlikely since about a week's notice is normally given. That said, I would not rule it out. Furthermore, an auction in March may also not be desired given current oil prices

Odunharry:
Noticed same also.

Please do you have the auction calendar?

No, I don't have a calendar. I simply check the DMO's website for their monthly bond auction circulars here https://www.dmo.gov.ng/fgn-bonds/bonds-offer-circular

I noticed years ago there is usually one every month. But I have not seen an auction circular for this month listed. There is still another week to go so there might be one next week. I do think its unlikely since about a week's notice is normally given. That said, I would not rule it out. Furthermore, an auction in March may also not be desired given current oil prices

Yes ooo. We thank God 🙏

Odunharry:
Holiday is set

It appears the CBN is continuing to reduce the amounts allocated whilst also reducing the rates at the long end. Interestingly enough, there has also been, so far, no primary bond auction this month (7 working days to the end of March). Watching to see if one is done next week

Odunharry:
Rate drop

18 March 2036 FGN bond coupon payment received on time

Feb 2031 & Feb 2034 FGN Bond coupon payments received

Correct 👍✅

Joyful365:
The term marginal rate is merely descriptive - it implies that a small change has taken place compared to the last time.

If you invest, you're going to get what is quoted in the marginal rate, not the 19% you see at the top.

15% is not necessarily a terrible rate. Bond prices are not static and do change during the course of their tenors. These yields have ranged from 6% to 24% depending on the stability of a host of factors e.g., economy, exchange rates, growth rates etc at the time. As the economy improves, interest rates could come down further and Naira may continue to appreciate. If that occurs, typically yields would fall and bond prices would rise as they have been doing. It may or may not continue . Time will tell

DAramis:
Okay. makes perfect sense now. Going based on that, 15 percent is really a terrible rate to tie your money down for long term.

It would be better if it is Treasury bill purchase that was made hoping for opening of better rates for future investment.

Investment is not for the faint-hearted 😥

That's correct

DAramis:
Okay,thanks for the clarification. so I should look out for marginal rate quote and compare it with original bond offer. This shows the direction of the rate

Firstly, the decision to invest is a function of whether the bond and it accompanying 'yield' (more on that below) meets one's cashflow objectives.

Secondly, the Feb 2034 bond is a 10 year bond originally issued 2 years ago at 19%. The 19% was reflective of rates in secondary market two years ago. When existing bonds that are trading on the secondary market get re-issued, they are auctioned and the rate that clears the auction becomes 'marginal rate'. This marginal rate is usually reflective of current rates in the market and also determines the price you pay at the new auction.

Using the N1m as an example.

If you bought this bond two year ago, it would be at N100 per unit and you get N19 interest per per unit per annum being N190k in coupon interest received.

At yesterdays auction, the rate that cleared the auction was 15.5% including accrued interest (N.B: in the this auction, accrued interest is very negligible because the last coupon payment was 21 Feb and the auction was 23 Feb).

So the price per unit would be 19/15.5*100 = N122.58 per unit. So, a N1m bid would buy N815,793 worth of bonds at the auction. This is the face value of the quantity bought.

However, the interest paid would be the original bond coupon rate of 19% on N815,793 which would be N155,000 per annum.

FGN Bond prices have gone up over the last two years just as in this example, which brings one nicely onto 'yield'. Now the 'yield' is simply the amount received in coupon payment over the amount paid. So two years ago the coupon and yield was 19%. Today, whilst the bond coupon is unchanged, the yield is lower at 15.5% because the price of the bond is up c22.5%, i.e. N122.58

Note also that, even though N1m was invested in buying the bond, N815,793 is paid at maturity because that is the face value purchased at the current price.

Finally, your question about the USD:Naira exchange rate. This is a normal exchange rate risk bond investors are exposed to. It can go either way. It could go to N1000:$1, N2000:$1 or any rate for that matter. If the Naira does rise to N1000:$1 as in your example, then it simply means that Naira bonds bought today and their corresponding coupons would be worth more in US dollars and vice-versa if Naira falls. The most important thing is to be sufficiently diversified for all outcomes.

Hope the above helps

DAramis:
Can you explain in lay terms how this marginal rate works out for common man should I have invested? (The reopening rate was around 19% for February 2034 bond. Please use example 1million naira in your explanation for the cupoun payment to get)

Lastly, if dollar rates crashes further to 1000 naira per dollar and someone invest in bonds, do the person get more returns compared to when it was high dollar rate and original coupon rate offer for first bond subscription?

This reopening bond investment gives me confusion because I don't know if they will pay you with original rate or the new rate as indicated in that picture m...the so called marginal rate )

The large amount of failed subscription bids of yesterday's Bond Auction results (shown below) suggests the CBN is actively seeking to drive down the cost of borrowing and at the same time also reducing the amounts offered for subscription

jedisco:
It wouldn't happen overnight but the direction of travel should be clear. Same way inflation didn't drop from 30% to 15% in a day. Same also with government interest rates.
The CBN is not going to wake one morning and mandate all banks to lend at x%. They'd communicate clearly where they want things to go and use avenues like cash reserves, what percentage of loans have to be at a rate not exceeding x% of TB rates, limiting how much TBs or bonds banks can have on their balance sheet e.t.c. There are ample means to achive this - it's not hard. Other countries have and continue to do so. It goes without saying that the CBN TB rates form the bedrock of borrowing and banks should hardly go below that.


Yes, we have our issues- all other countries do.
I am a capitalist and there is no such thing as 100% capitalism. Governments exist to protect and provide guard rails for the better good without being unduly intrusive.
What I'm highlighting isn't rocket science. Many countries including developing ones have done or are doing it. The reason they succeed is not because their citizens have 4 heads but cos they built the system. Nobody likes paying back loans or tax but they do when there are repercussions.


To be clear, I am not simply blaming individual banks. They should seek the best returns for their shareholders. Most of the fault falls with the CBN/government. Building a strong middle class benefits all including the banks.
If we can't build a proper financial system, then we have no business using fiat- we should go back to using cowries. The birth of the mortgage system and widespread business and consumer credit was what turbocharged and still supports most western nations. There is virtually no poor country with those and every rich nation has them.

The FGN Jan 2035 Bond Auction closed at 17.52% inclusive of accrued interest to 28 January 2026 which was due to be paid back on 29 January 2026 (although mine dropped on 2 February). When you net off the accrued interest it comes to 18.43%.

"INTEREST RATE: For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument."

I put a bid of 17% on my bid form in January and it was successful. N.B: All successful bids get the same rate that clears the auction.
Given that rates have since trended down a bit, to increase the chances of your February auction being successful, it might be a good idea to put 16% or 16.5% on your bid form since all successful bids get the same rate.

Hope the above helps

digitalinvestor:
@skydiver01
How did you manage to get the rate? From my understanding the stop rate rate for 2035 was 17.52%, did you leave the rate blank or you input the rate you got yourself. I did put 20% so my bid got rejected.

I am planning to bid for the next fgn bond in few days, so your advice will be appreciated.

Thanks in advance.

Some may be interested

Excellent analysis applying relevant financial ratios and apt summation👍✅

ositadima1:
Let me focus strictly on Dangote Sugar, because once you strip away market momentum, the numbers tell a much more constrained story.

Starting with operating performance. In Q3-2025, Dangote Sugar generated about ₦43bn in operating profit (EBIT), while finance costs were roughly ₦30bn in the same quarter. That immediately tells you something important: about 70% of operating earnings was absorbed by interest expense. So even before talking about growth or valuation, the business is operating under heavy financial pressure.

If you annualise Q3 operating performance conservatively, EBIT comes to roughly ₦170bn. Applying a normal Nigerian corporate tax rate of 30%, normalized after-tax operating profit (NOPAT) is approximately ₦119bn. That is the sustainable earning power of the operations before reinvestment and financing effects.

Now look at what those earnings are generated on. As of September 2025, total assets stood at about ₦1.02 trillion, with cash of roughly ₦80bn. Removing cash gives operating assets of approximately ₦936bn. When you divide normalized NOPAT by invested capital, you get an operating return:

₦119bn ÷ ₦936bn ≈ 12.7% ROIC

That number matters only when you compare it to the cost of capital.

To estimate the cost of capital, start with equity. Nigeria’s long-term risk-free rate is around 15%. Add an equity risk premium of about 10%, and apply a beta of roughly 1.1 for a leveraged consumer industrial business. That gives a cost of equity of:

15% + (1.1 × 10%) ≈ 26%

Now look at debt. Based on reported finance costs and outstanding borrowings, Dangote Sugar’s pre-tax cost of debt is roughly 18–20%. After the tax shield, that comes down to about 13%.

Given the company’s capital structure, roughly 70% debt and 30% equity in economic terms, the weighted average cost of capital works out to:

(30% × 26%) + (70% × 13%) ≈ 17% WACC

This comparison is critical. Dangote Sugar’s ROIC of ~12–13% is below its WACC of ~17%. That means, on a purely economic basis, the business is not currently creating value with growth. At best, it is treading water.

Growth also requires reinvestment. Even assuming a modest 4% long-term growth rate, and using the current ROIC level, the reinvestment requirement is:

Reinvestment rate ≈ g ÷ ROIC
≈ 4% ÷ 12.7% ≈ 31%

Applied to NOPAT, that means Dangote Sugar must reinvest roughly ₦37bn every year just to sustain low-single-digit growth. That reinvestment comes before any free cash is available to capital providers.

After reinvestment, free cash flow to the firm is approximately:

₦119bn − ₦37bn ≈ ₦82bn

That is enterprise-level cash flow, before debt service. And this is where the balance sheet becomes decisive.

Financial liabilities are still above ₦736bn, while cash is under ₦80bn, leaving net debt of roughly ₦650bn. With this level of leverage, a significant portion of enterprise cash flow is structurally redirected to lenders. The Q3 interest burden already demonstrates this reality in practice.

Cash flow confirms the picture. Despite reporting profits, operating cash flow remains weak and at times negative, meaning the business is still not self-funding. It continues to rely on refinancing, short-term borrowing, and working-capital movements rather than internally generated surplus cash.

This is why enterprise value on its own can be misleading here. Yes, EV captures the whole business, but when ROIC is below WACC and leverage is high, enterprise value does not automatically translate into equity value creation. The economics are constrained by financing, not optics.

On backward integration, the financial statements are very clear. Biological assets are about ₦18–19bn, which is less than 2% of total assets, and that figure has not grown meaningfully year-on-year. Inventories, at around ₦130bn, are still dominated by imported raw sugar and refined stock. Gross margins remain around 19–20%, which suggests that local sourcing has not yet reduced FX exposure or input costs in a material way.

If backward integration were already working at scale, we would expect to see ROIC rising, margins expanding, or operating cash flow improving. None of those shifts are visible yet in the numbers. For now, backward integration remains a long-term strategic promise, not a current economic driver.

So when Dangote Sugar is highlighted based on Q3 performance or enterprise value, I think the math needs to be acknowledged. The business is operating with ROIC below WACC, heavy reinvestment needs, and a leveraged balance sheet. Any upside case is therefore macro-dependent, on lower interest rates, FX stability, and time, rather than already embedded in the operating fundamentals.

That distinction is important if we’re being honest about what the numbers are actually saying.

Numbers first, narratives later.
-- ositadima1

And our Naira appreciation trend continued
Naira currently N1,365:$1. Should continue if structural imbalances continue to be addressed.
Would be good to see N1,000:$1 and lower within 3 years

skydiver01:
Meanwhile, FGN bond prices have been going up (reducing yields) while the Naira has also been slowly appreciating

Re: the fee. Na so I see am oooo. Wetin I for do? Personally, I don't think it is high. It is 0.41% of the subscription investment and I am ok with it. Anyway, re: the 18.43%. The bond was originally issued at 22.6% but was trading on the secondary market at the time of the re-opening auction at c17.5% yield. So the primary re-opening auction which closed at 18.43% was still marginally more attractive than the secondary market. 18.43% was the marginal rate that cleared the auction amount offered. It is not a 'new issue' auction but a re-opening auction of an existing bond whose rate was already set when originally issued and is trading on the secondary market.
Hope the explanation helps

Odunharry:
Omo see coupon and why is fee high 250k .

Boss biko explain the closing at 18.43% 10year bond when it was reopened at 22.6%

The FGN 2035 (10yr Re-opening) Primary Bond Auction closed at 18.43% (original issue coupon 22.6%) and my bid was successful Payment was made on the settlement date 28 January including accrued interest to 28 January. The coupon due on 29 January dropped on 2 February

Odunharry:
Yea I know.. Sky is a bond man.

Your eyes are seeing correctly. The bonds were originally issued at those rates. However, the yield that clears the reopening auctions will be different. They would be similar to current yields in the secondary market, i.e. not the coupon rate. One benefit is it does not attract WHT. That's why I said 'some may be interested'

Odunharry:
10year 22.6% abi na my eyes

Some may be interested in this

Its not hard nah... we go carry dem to court

VeeVeeMyLuv:
You know how dubious these guys can be

For instance

You invested 10m in TBills at rate of 15% for 352 days.
Upfront you get the interest to the tune of 1.35m after withholding tax of 150k was taken off.

Now at the maturation of the tenor (after the 352 days), will the government still tax this 10m?

By removing VAT (10%) and income tax (25%) from the 10m, by playing deaf and dumb in being unable to discriminate between income and investment?

Leaving you with 6.5m?

The New Tax Reform Law (1 Jan 2026) is applicable to income not capital. Interest income on short-term securities and dividends excluding government bonds, have WHT applied to them (10%). So no change there. Note, you can utilise your WHT deductions against your total taxable income should you choose .

A summary of the Tax Reform Law is here:

https://fiscalreforms.ng/index.php/2025/11/03/fifty-50-tax-exemptions-and-reliefs-that-will-benefit-the-masses-under-the-new-tax-reform-laws-effective-from-1-january-2026/

RayRay06677:
What will be new?

Definitely nothing, we are paying already so new law has no new hold on us.


Gurus can explain further,

Merry Christmas 🎄Wishing us all a Happy and Prosperous New Year 🙏