DMO opens for subscription to N1.2 trillion FGN bonds

The Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), conducted a bond auction yesterday, offering a total of $1.2 trillion across three reopened maturities.

According to a circular obtained by the authority, the size of the offering remained unchanged from June, reinforcing the government’s high financing requirements amid persistent fiscal pressures.

The issuance will be evenly split, with $400 billion offered in FGN JAN 2035 bonds at 22.60% (10 years), FGN APR 2037 at 16.25% (20 years) and FGN JUN 2038 bonds at 15.45% (15 years).

In the June bond auction, the DMO reopened the FGN JAN 2035 bonds at 22.60% and FGN APR 2037 at 16.25% FGN, maintaining the same maturities offered in the May auction.

The authority offered a total of $1.2 trillion between the two reopened instruments, marking the largest bond issuance on record. This surpassed the $600 billion offered in May and the previous record of $900.00 billion issued in January.

The magnitude of the larger supply suggests that despite the clear frontloading of domestic borrowing in the first quarter of 2026, high government financing requirements continued to drive large bond issuance amid persistent fiscal pressures.

The issuance was evenly split, with $600.00 billion allocated to each of the 22.60% FGN JAN 2035 (10-year) and 16.25% FGN APR 2037 (20-year) bonds.

Demand was equally distributed across both instruments, with the FGN JAN 2035 attracting N705.22 billion in subscriptions and the FGN APR 2037 receiving N708.27 billion, bringing the total subscriptions to N1.41 trillion.

In a note, Meristem Securities Limited said this represents the second-highest subscription level recorded this year, behind only the $2.7 trillion recorded in February, as investors rushed to lock in yields in anticipation of a falling interest rate environment.

The DMO allocated N600.90 billion and N621 billion between the JANUARY 2035 and APRIL 2037 bonds respectively, resulting in a total allocation of N1.22 trillion. The bid-to-cover ratio fell to 1.16x from 1.30x in the previous auction.

As a result, the bid-to-cover ratio fell to 1.16x from 1.30x in the previous auction, indicating that demand remained robust while the allocated amount increased in tandem.

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