FGN Bonds Rate Fall as DMO Allots N805.16bn

The federal government’s bond borrowing cost declined across all three instruments offered at Monday’s auction, as the Debt Management Office (DMO) allotted N805.16 billion to investors at lower stop rates compared to previous auctions.

The DMO reopened the 22.60 per cent January 2035, 16.25 per cent April 2037 and 15.45 per cent June 2038 FGN bonds, offering a combined N1.10 trillion to investors, who accepted lower yields across the three maturities.

Specifically, the stop rate on the January 2035 bond fell by 119 basis points from 18.34 per cent at the previous auction to 17.15 per cent. Similarly, the April 2037 bond recorded a 116 basis points contraction in its stop rate, declining from 18.35 per cent to 17.19 per cent. The June 2038 bond also recorded a decline, with its stop rate falling by 61 basis points from 18.40 per cent to 17.79 per cent.

Demand for the instruments remained strong, with total bids reaching N1.73 trillion, representing a bid to offer ratio of 1.6 times. The DMO subsequently allotted N805.16 billion, translating to a bid to cover ratio of 2.2 times.

The January 2035 bond attracted bids worth N513.61 billion against the N250 billion offered, although only N64.13 billion was allotted. For the April 2037 bond, investors submitted bids totalling N392.48 billion against an offer of N100 billion, while N110 billion was allotted. The June 2038 bond, which had the largest offer of N750 billion, attracted the highest demand at N821.32 billion, with N631.02 billion eventually allotted.

The settlement date for the three instruments is August 19, 2026.