Investors place N1.73tn bids as DMO allots FGN bonds

Investors demonstrated a strong appetite for Nigerian government debt, submitting bids totaling N1.73 trillion for Federal Government of Nigeria (FGN) bonds at an auction held by the Debt Management Office (DMO) on August 17, 2026. The DMO ultimately allotted N1.56 trillion across three securities, exceeding the N1.10 trillion initially offered.

The robust demand was particularly evident in the non-competitive segment, which contributed significantly to the oversubscription. The auction featured reopened FGN bonds maturing in 2035, 2037, and 2038. The 15.45% FGN June 2038 bond attracted the highest interest, receiving bids valued at N821.32 billion and securing a total allocation of over N1.37 trillion, including non-competitive bids.

Interestingly, the marginal rates at this August auction were notably lower than those recorded in July. For instance, the 2035, 2037, and 2038 bonds cleared at marginal rates of 17.15%, 17.19%, and 17.79%, respectively. These rates represent a decline of over 100 basis points compared to the previous auction, suggesting that investors were willing to accept lower yields while maintaining strong demand for government debt instruments. The DMO maintained the original coupon rates for these bonds, which are backed by the Federal Government and offer tax-exempt benefits.

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The auction results highlight continued investor appetite for longer-dated government securities, with the 2038 bond alone accounting for almost half of the total value of bids received.