The Debt Management Office (DMO) has raised about N614.5 billion from the Federal Government’s May 2026 bond auction, following strong investor participation across two reopened instruments.
According to the auction results released after the exercise held on May 18, 2026, the Federal Government offered two bonds — the 22.60% FGN January 2035 and the 16.2499% FGN April 2037 — each with an initial offer size of N300 billion. Settlement is scheduled for May 20, 2026.
Investor demand was skewed in favour of the longer-dated April 2037 bond, which attracted higher subscriptions, including significant non-competitive bids, resulting in a larger allotment compared to the 2035 paper.
The 22.60% FGN January 2035 bond recorded total subscriptions of N262.23 billion from 130 bids, out of which 79 were successful. The DMO allotted N137.67 billion on the instrument, which has a remaining tenor of 8 years and 8 months. Bids ranged between 15.00% and 22.60%, with the marginal rate settling at 17.00%. Successful bids were allotted at this marginal rate, while the original coupon of 22.60% remains unchanged.
By contrast, the 16.2499% FGN April 2037 bond attracted stronger institutional interest, with 135 bids submitted and 96 accepted. Total subscriptions stood at N253.94 billion, alongside a substantial N280 billion in non-competitive bids. This pushed total allotment to N476.84 billion, significantly above the initial offer size.
The April 2037 bond, with a remaining tenor of 10 years and 11 months, cleared at a marginal rate of 17.04%, with bid rates ranging between 14.00% and 18.49%.
Across both instruments, successful bids were allotted at marginal rates of 17.00% and 17.04%, respectively, while the original coupon rates remain unchanged.
The auction continues the Federal Government’s pattern of re-opening existing bond lines to meet domestic borrowing needs amid sustained investor appetite for sovereign debt instruments. Similar auctions in early 2026 had recorded heavy oversubscriptions, including the January issuance that significantly exceeded its offer size.
In January 2026, total allotments reached N1.54 trillion against an offer of N900 billion, driven by strong demand across reopened bonds, including the January 2035 paper. This was followed by a moderation in yields in subsequent months, as seen in February and April auctions.
FGN bond auctions remain a key financing channel for government budget deficits and expenditure needs, with strong participation from pension funds, banks, and asset managers seeking relatively secure fixed-income assets.
Market participants are now watching the direction of monetary policy at the upcoming Central Bank of Nigeria meeting, as interest rate signals and inflation trends continue to shape demand in the domestic debt market.
The DMO concluded the May auction with total allotments of approximately N614.5 billion, slightly above the indicative offer levels.
