Amidst Modest Yields, Subscription to FGN Bond Hits N4.95trn in 55 Days
Kayode Tokede
Despite moderate yields, investors’ total FGN bond subscription reached N4.95trillion in the first two months of 2026 , about 115 per cent increase over N2.3 trillion in the first two months of 2025.
The federal government through the Debt Management Office (DMO), during the period, offered to raise N1.7trillion as against the N800 billion in 2025.
Eventually, the government raised an estimated N2.19 trillion, representing an increase of nearly 46 per cent over N1.51 trillion in 2025.
A breakdown of the FGN bond audition result showed that in January 2026, the DMO reopened the FEB-2031, FEB-2034 and JAN-2035 bonds, offering a total of N900.00 billion.
Total demand settled at N2.25 trillion with the DMO eventually allotting (non-competitive allotment) N1.68 trillion at respective stop rates of 17.62per cent, 17.50per cent, and 17.52per cent.
For the February 2026 FGN bond auction, the DMO reopened the AUG-2030, MAY-2033 and FEB-2034 bonds, offering a total of N800.00 billion.
Total demand settled at N2.6.9 trillion with the DMO eventually allotting N524.28 billion. The stop rate on the FEB 2034, which was on-the-run last month, declined by 200 basis points to 15.50 per cent.
THISDAY had reported that the debt office in 2025 raised an estimated N5.26 trillion via the FGN bond market, about a 9.93 per cent drop from N5.84 trillion raised in 2024.
The federal government had projected to borrow approximately N13 trillion from FGN bonds in 2025 to finance budget deficit.
The N4.95 trillion total subscription in the first two months of 2026 is a reflection that investors, most especially the Pension Fund Administrators (PFAs) tend to invest in risk-free instruments, which the FGN Bond and Nigerian Treasury Bills (NTB) offer to the investing public.
The DMO has since the beginning of the year continually re-opened some FGN Bonds amid modest interest rates in a move to attract investors.
Finance analysts attributed the strong demand for FGN bonds to modest yields, stressing that the over-subscription also revealed that investors have confidence in the federal government’s ability to meet its debt obligations.
“The appetite for FGN bonds indicates that PFAs, and Nigerian investors prefer investment instruments with less volatility that assures them of their capital returns albeit with low yield on investment. So, investors expect higher yield for this particular issuance, while the government does not wish to borrow at a higher interest rate,” said an investment banker & stockbroker, Mr. Tajudeen Olayinka.
In recent years, Nigeria’s rising debt profile has been a topic of concern, as Vice President, Highcap Securities Limited, Mr. David Adnori, warned that the country’s debt levels are unsustainable.
The DMO had maintained that the robust subscription levels highlight continued investor confidence in the government’s debt instruments, driven by attractive yields and Nigeria’s stable credit ratings.
