FG Raises N614.5bn Through Reopened Bond Auction

The Federal Government has raised a total of N614.5bn through the May 2026 bond auction conducted by the Debt Management Office (DMO), with strong investor appetite recorded for the longer-tenored 16.2499 per cent FGN APR 2037 bond.

The auction result released by the DMO on Tuesday showed that the government reopened two existing instruments, the 22.60 per cent FGN JAN 2035 bond and the 16.2499 per cent FGN APR 2037 bond, with each initially offered at N300 billion during the auction held on May 18, 2026.
According to the DMO, total allotment across the two instruments stood at N614.5bn, reflecting sustained investor confidence in Federal Government securities despite prevailing macroeconomic and interest rate conditions.

The APR 2037 bond emerged as the more sought-after instrument, attracting significant participation from institutional investors and accounting for the larger share of total subscriptions and allotments.

The bond received 135 bids, out of which 96 were successful, while total subscriptions reached N253.94bn.

In addition, the instrument attracted N280bn in non-competitive bids, pushing total allotment on the bond to N476.84hn, significantly above the original offer size of N300 billion.

The DMO stated that the APR 2037 bond, which has a remaining tenor of 10 years and 11 months, recorded bid rates ranging from 14.00 per cent to 18.49 per cent, while the marginal rate settled at 17.04 per cent.
Successful investors in the instrument were allotted at the marginal rate of 17.04 per cent, although the original coupon rate of 16.2499 per cent remains unchanged.

Meanwhile, the 22.60 per cent FGN JAN 2035 bond recorded total subscriptions of N262.23bn from 130 bids submitted by investors, with 79 bids accepted by the DMO.

The Office allotted N137.67bn on the instrument, which has a remaining tenor of eight years and eight months.
Bid rates for the JAN 2035 bond ranged between 15.00 per cent and 22.60 per cent, while the marginal rate closed at 17.00 per cent.

The DMO explained that successful bids for the JAN 2035 bond were allotted at the marginal rate of 17.00 per cent, while the original coupon rate of 22.60 per cent remains unchanged.

The auction results indicate continued strong demand for sovereign debt instruments, particularly among pension fund administrators, asset managers and other institutional investors seeking relatively secure fixed-income assets amid evolving market conditions.

FGN bond auctions remain one of the Federal Government’s major funding channels for financing budget deficits, supporting infrastructure development and meeting other public expenditure obligations.
Settlement for the successful allotments has been scheduled for May 20, 2026.