The Debt Management Office (DMO) allotted ₦2.02 trillion in Federal Government of Nigeria (FGN) bonds at its October 19, 2026 auction, as yields on two longer-dated securities rose by up to 50 basis points.
The total allotment comprised ₦1.22 trillion allocated through competitive bidding and another ₦800 billion through non-competitive sales, according to auction results reported by The PUNCH on October 22, 2026.
The auction attracted subscriptions of approximately ₦1.75 trillion against an initial offer of the same amount across three reopened bonds. Despite the strong overall demand, investors showed different levels of appetite for the securities, with the September 2036 bond attracting the highest subscriptions and the February 2034 bond falling short of its offer.
The September 2036 bond received bids worth ₦925.35 billion against an offer of ₦800 billion. The DMO allotted ₦781.31 billion through competitive bidding at a marginal rate of 17.29%, up from 16.79% at the September auction.
The June 2038 bond attracted subscriptions of ₦518.32 billion against an offer of ₦450 billion. Its competitive allotment stood at ₦350.72 billion, while the marginal rate increased to 17.19% from 16.85% in September.
Demand was weaker for the February 2034 bond, which attracted bids of ₦304.08 billion against an offer of ₦500 billion. The DMO allotted ₦92.14 billion through competitive bidding at a marginal rate of 16.99%.
Nairametrics reported on October 20, 2026, that the DMO also allotted ₦400 billion each through non-competitive sales for the February 2034 and September 2036 bonds, bringing total allotments across the three securities to approximately ₦2.02 trillion.
The additional allocations mean the total amount sold exceeded the initial offer by about ₦274 billion. The figure should be distinguished from the ₦1.22 trillion competitive allotment, which excludes the non-competitive transactions.
The rise in marginal rates on the longer-dated bonds signals that the government accepted higher borrowing costs to attract funds. The September 2036 bond’s rate increased by 50 basis points, while the June 2038 bond’s rate rose by 34 basis points.
Higher yields can increase government debt-servicing costs, although they also offer investors higher returns on newly purchased securities, depending on the bond’s terms and prevailing market prices.
The October auction followed the Central Bank of Nigeria’s September 22, 2026 decision to reduce the Monetary Policy Rate by 350 basis points to 23%. The bond auction results show that borrowing rates can still rise despite a reduction in the central bank’s benchmark rate, as investor demand and pricing conditions also influence government securities.
The results underline the Federal Government’s continued reliance on domestic borrowing to raise funds, while highlighting the importance of the returns investors demand when lending to the government through the bond market.
