DMO raises N929bn as bond demand hits N1.74trn

The Debt Management Office (DMO) raised N929.32 billion from the Federal Government’s July 2026 bond auction after investors submitted subscriptions worth N1.74 trillion, underscoring strong appetite for sovereign debt despite the government allotting less than the amount offered.

Results of the auction released by the DMO showed that the total subscriptions exceeded the N1.2 trillion offer by N540 billion, reflecting sustained investor confidence in Federal Government securities amid elevated yields in the domestic fixed-income market.

The auction, conducted on July 20, comprised the re-opening of the 22.60 per cent FGN January 2035 bond, the 16.2499 per cent FGN April 2037 bond and the 15.45 per cent FGN June 2038 bond, with settlement scheduled for July 22.

The DMO allotted N245.73 billion from subscriptions of N555.47 billion for the January 2035 bond at a marginal rate of 18.34 per cent.

The April 2037 bond attracted the strongest investor demand, recording subscriptions of N665.19 billion, while N381.46 billion was allotted at a marginal rate of 18.35 per cent.

For the June 2038 bond, investors subscribed N518 billion, with the DMO allotting N302.13 billion, including a N50 billion non-competitive allotment, at a marginal rate of 18.40 per cent.

Altogether, the DMO received 556 bids valued at N1.74 trillion and accepted 308 successful bids across the three instruments.

The Office explained that while successful investors would receive allocations at the respective marginal rates, the original coupon rates of 22.60 per cent, 16.2499 per cent and 15.45 per cent for the three bonds would remain unchanged.

The outcome highlights sustained demand for long-term government securities despite the Central Bank of Nigeria’s decision to retain the Monetary Policy Rate at 26.5 per cent, signalling continued investor preference for fixed-income assets offering attractive real returns.

The July auction follows the June 2026 bond sale, during which the DMO reopened two Federal Government bonds to raise N1.2 trillion through 10-year and 20-year instruments.

FGN bonds remain Nigeria’s benchmark long-term debt instruments, issued to finance budget deficits and public expenditure. They are backed by the full faith and credit of the Federal Government and qualify as trustee investments under the Trustee Investment Act while also enjoying tax-exempt status under the Companies Income Tax Act and the Personal Income Tax Act.