DMO Targets N600bn Domestic Borrowing From May Auction

…Lists N47.335bn Green Bond on NGX, FMDQ

The Debt Management Office (DMO) has announced plans to raise N600 billion through the May 2026 Federal Government of Nigeria (FGN) bond auction as authorities intensify efforts to finance the 2026 budget and sustain liquidity in the domestic debt market.

The debt office also listed the 18.95 per cent N47.335 billion Series III Sovereign Green Bond due in June 2030 on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited.

The DMO also announced the listing in a statement on Wednesday, saying the bond was issued by the federal government through the office to raise funds for environmentally sustainable projects.

According to the DMO’s offer circular, the bond auction is scheduled for May 18, 2026, and successful bidders will receive allotment and settlement on May 20, 2026.

The offer consists of two reopened bond instruments, each valued at N300 billion, targeted primarily at institutional investors and high-net-worth individuals seeking stable, long-term fixed-income investments.

The instruments include the N300 billion 22.60 per cent FGN January 2035 bond and the N300 billion 16.2499 per cent FGN April 2037 bond. The DMO explained that both securities are re-openings of previously issued bonds, meaning the coupon rates have already been fixed, while the final prices will be determined through the auction process.

The bonds are being offered at N1,000 per unit, with a minimum subscription requirement of N50.001 million and additional investments accepted in multiples of N1,000.

The latest issuance highlights the federal government’s continued reliance on the domestic debt market to fund fiscal obligations, while also expanding investment opportunities for market participants seeking relatively secure instruments backed by the Federal Government’s sovereign guarantee.

FGN bonds remain among the most sought-after investment assets in Nigeria’s fixed-income market because they are considered low-risk instruments and qualify as trustee investments under the Trustee Investment Act.

Market analysts expect the auction to attract strong participation from pension fund administrators, insurance companies, asset managers and other institutional investors amid sustained appetite for government securities and attractive yields across the bond market.

The upcoming auction follows a strong outing in April, when the federal government recorded significant oversubscription across its bond offerings.

Data released by the DMO showed that the April auction attracted total subscriptions of N948 billion, far exceeding the N700 billion initially offered.

The April issuance featured the re-opening of three instruments: the 17.945 per cent FGN August 2030 bond, the 17.95 per cent FGN June 2032 bond, and the 22.60 per cent FGN January 2035 bond.

A breakdown of the auction results showed that investors submitted a total of 339 bids across the three maturities, with demand concentrated in longer-dated securities.

The 10-year January 2035 bond emerged as the most attractive instrument, drawing subscriptions worth N599.02 billion against the N300 billion offered, reflecting investors’ growing preference for higher-yield assets at the long end of the yield curve.

Similarly, the 7-year 2032 bond recorded N167.04 billion in bids compared to the N100 billion offered, also reflecting moderate investor interest. However, the 5-year 2030 bond saw relatively weaker demand, with subscriptions of N181.94 billion falling short of the N300 billion offer size, suggesting a softer appetite for shorter tenors.

The auction result also showed that bid rates ranged widely between 15.00 per cent and 22.60 per cent, highlighting divergent expectations among market participants regarding interest rate movements and macroeconomic stability.

Despite the wide bid range, the DMO maintained pricing discipline, with marginal rates settling lower at 16.30 per cent for the 2030 bond, 16.50 per cent for the 2032 bond, and 16.59 per cent for the 2035 bond

Meanwhile, the DMO said the green bond will support Nigeria’s transition to a low-carbon and climate-resilient economy. It said the Series III offer is the third sovereign green bond issued under the programme and reflects its efforts to mobilise capital for climate-aligned projects.

The office said the listing on NGX and FMDQ is expected to improve liquidity and price transparency for investors, while also helping to expand awareness and adoption of climate-linked financial instruments in the domestic market.

It added that Chapel Hill Denham and Stanbic IBTC Capital Limited acted as issuing houses and bookrunners, while S.P.A. Ajibade and Co served as legal adviser.

The DMO said it remains committed to broadening investment options and strengthening Nigeria’s domestic bond market.

The latest listing comes as the Federal Government steps up efforts to secure alternative financing for climate and environmental projects.

Earlier this year, the government said it planned to raise as much as [N500] billion through green bond issuances in 2026 to fund climate-related infrastructure and sustainability projects.

Investor interest in the instrument has remained strong. Last year’s [N50] billion federal green bond was oversubscribed, attracting subscriptions worth more than twice the amount offered. Nigeria’s first sovereign green bond was also fully subscribed.

The government’s green financing drive also aligns with broader environmental reforms. President Bola Tinubu earlier approved the implementation of Nigeria’s carbon market framework, which the government says could generate at least [ \$3 ] billion annually by 2030.

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