DMO Raises N929.32bn From FGN Bond Auction Amid N1.7trn Subscription

The Debt Management Office (DMO) has raised a total of N929.32 billion at its July 2026 Federal Government bond auction, less than N1.2 trillion it planned to raise, despite strong investor demand for the three reopened instruments offered for subscription.

The DMO had offered N1.2 trillion, comprising N400 billion each of the 22.60% FGN January 2035, 16.2499% FGN April 2037 and 15.45% FGN June 2038 bonds at the auction conducted on July 20, 2026, with settlement scheduled for July 22, 2026.

Auction results released by the debt office showed that investors submitted subscriptions worth N1.74 trillion, comprising N555.47 billion for the January 2035 bond, N665.19 billion for the April 2037 bond and N518.00 billion for the June 2038 bond.

Out of the subscriptions received, the DMO allotted N245.73 billion for the January 2035 bond, N381.46 billion for the April 2037 bond and N302.13 billion for the June 2038 bond, bringing the total amount allotted to the market to N929.32 billion. In addition, the June 2038 bond recorded a N50 billion non competitive bid.

The January 2035 bond attracted 184 bids, of which 90 were successful, while the April 2037 instrument received 211 bids with 126 successful. The June 2038 bond recorded 161 bids, out of which 92 were successful.

The auction cleared at marginal rates of 18.34 per cent for the January 2035 bond, 18.35 per cent for the April 2037 bond and 18.40 per cent for the June 2038 bond.

According to the DMO, the original coupon rates of 22.60 per cent, 16.2499 per cent and 15.45 per cent on the respective bonds will be maintained following the reopening of the instruments.

Commenting on the bond auction, analysts at Coronation Merchant Bank noted that the debt office chose to leave some of the demand unmet rather than raise stop rates on the bond, a shift from June’s willingness to concede to higher rates

“We expect FGN bond stop rates to hold broadly around current levels (18.3–18.4%) going into August, with the DMO likely to keep prioritising rate discipline over full allotment while subscriptions stay comfortably above target. This assumes the MPC holds and inflation prints remain in the mid-teens.

“Upside risk would come from a resumed inflation uptick or a weaker Naira; downside risk would need a sustained lower inflation print or an MPC easing signal, neither likely before Q4 2026. A key swing factor: if financing needs pick back up, expect stop rates to drift higher even without a change in the macro backdrop.

“For portfolio positioning, we maintain a preference for shorter duration (NTBs and 5–7Y re-openings) until June’s inflation easing proves sustained, while noting current long-end stop rates (18.3%+) already look attractive on a real-yield basis if disinflation resumes in H2 2026– a case strengthened by the DMO’s evident unwillingness to concede higher rates even under strong demand.”