DMO Targets N600bn from FGN Bond Offerings

The Debt Management Office (DMO), on behalf of the federal government, has announced plans to raise N600 billion through the May 2026 Federal Government of Nigeria (FGN) bond auction as part of efforts to finance the 2026 budget and deepen the domestic debt market.

The DMO, in an offer circular said the auction would hold on May 18, 2026, while successful investors would be allotted and settled on May 20, 2026. The bond issuance comprises two re-opened instruments worth N300 billion each, targeting institutional and high-net-worth investors seeking long-term fixed-income assets.

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

The debt office stated that the bonds are offered at N1,000 per unit, with a minimum subscription of N50.001 million and additional investments accepted in multiples of N1,000.

The latest bond offer underscores the Federal Government’s continued reliance on the domestic debt market to fund fiscal obligations, while also providing investors with secure instruments backed by the full faith and credit of the government.

FGN bonds are regarded as one of the safest investment options in the Nigerian market, as they are direct obligations of the Federal Government and qualify as trustee investments under the Trustee Investment Act.

The auction is expected to attract strong demand from pension fund administrators, insurance firms, asset managers and other institutional investors, amid sustained appetite for government securities and relatively attractive yields in the fixed-income market.

Last month, the bond auction had recorded oversubscription, with total bids rising to N948 billion, significantly above the N700 billion on offer. Data released by the Debt Management Office (DMO) showed that the April auction 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 results indicated a total of 339 bids across the three maturities, with demand largely skewed towards longer-dated securities. The 10-year 2035 bond emerged as the most attractive to investors, attracting subscriptions of N599.02 billion against the N300 billion offered, underscoring a preference for higher-yield instruments at the long end of the 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.