The value of outstanding corporate bonds on Nigeria’s FMDQ Exchange rose to N2.30 trillion ($1.67 billion) in June, reinforcing the segment’s position as the largest component of Nigeria’s non-sovereign debt market despite a slowdown in new bond issuance.
The increase from N2.29 trillion ($1.66 billion) in May reflected sustained investor appetite for corporate debt amid elevated interest rates.
According to FMDQ Exchange’s latest fixed income market report, corporate bonds remained the dominant non-sovereign instrument on the exchange after a surge in issuances earlier this year. Outstanding corporate bond value climbed from N1.81 trillion ($1.32 billion) in March to a record N2.34 trillion ($1.70 billion) in April before easing slightly to N2.30 trillion ($1.67 billion) in June.
Although outstanding bond values remained near record levels, primary market activity slowed considerably. New corporate bond listings totalled just N15 billion ($10.9 million) in June, recovering from zero issuance in May but remaining far below the N531.89 billion ($386.7 million) raised in April, which marked the strongest month for bond issuance during the first half of the year.
The commercial paper market also continued its gradual recovery after months of contraction. Outstanding commercial paper rose to N465.34 billion ($338.3 million) in June from N448.88 billion ($326.3 million) in May, extending a rebound that began after the market fell to a low of N319.51 billion ($232.3 million) in April.
Despite the increase in outstanding commercial paper, fresh issuance weakened sharply. New commercial paper listings dropped to N36.79 billion ($26.8 million) in June from N189.15 billion ($137.6 million) a month earlier, indicating that while existing securities remained in circulation, companies became more cautious about raising fresh short-term debt.
Borrowing costs showed signs of easing across the market. The average discount rate for quoted commercial paper declined to 19.18% in June from 19.78% in May, extending a broader downward trend from 22.49% recorded a year earlier. Average yields on 91-to-180-day and 181-to-364-day commercial paper also fell, suggesting improving funding conditions for corporate issuers.
Meanwhile, the subnational bond segment remained unchanged at N661.06 billion ($480.6 million), with no new state government bond issuance recorded since Lagos State’s dual-tranche offering in February boosted the market. The absence of fresh state borrowing contrasted with stronger activity in the corporate debt market, which has continued to attract issuers despite elevated financing costs.
The latest figures underscore the resilience of Nigeria’s corporate debt market as companies continue to rely on bond financing to fund expansion, refinance obligations and strengthen liquidity. While higher interest rates have moderated new issuance, the sustained growth in outstanding corporate bonds suggests investors remain willing to provide long-term capital to creditworthy issuers, reinforcing the importance of the domestic debt market in financing private sector growth.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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