Subscription to FGN Bond Hits N6.8trn in Four Months on Investors’ Confidence

Kayode Tokede  

Amid moderate yields, total subscription to FGN bonds in the first four months of 2026 surged to N6.8 trillion, representing about  87 per cent increase when compared to N3.7 trillion in the first four months of 2025. 

The FGN Bond  auction comes against a backdrop of sustained government reliance on the domestic debt market to fund fiscal obligations amid constrained external financing conditions. It also reflects the ongoing strategy to deepen Nigeria’s sovereign yield curve through regular re-openings across multiple maturities.

According to the FGN bond auction result obtained by THISDAY, the   government through  the  Debt Management Office (DMO)  in the first four months of 2026 offered to raise N3.15 trillion to bridging the budget deficit. 

The N3.15 trillion offered is about 117 per cent increase over the N1.45 trillion offered in the first fourth months of 2025.  

In all, the debt office raised an estimated N2.96 trillion in the first four months of 2026, representing an increase of nearly 26 per cent over N2.36 trillion in the first   four months of   2025.  

Insight into the monthly FGN Bond auction by THISDAY showed that  in January 2026, the  DMO reopened the FEB-2031, FEB-2034 and JAN-2035 bonds, offering a total of N900.00 billion. According to the result, a total demand settled at N2.25 trillion , with the DMO eventually allotting (non-competitive allotment) N1.68 trillion at respective stop rates of 17.62 per cent, 17.50 per cent, and 17.52 per 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.

During the FGN bond auction in March 2026, the DMO reopened the AUG-2030, JUN-2032 and MAY-2033 bonds, offering a total of N750.00 billion. Total demand settled at N931.50 billion (bid-to-offer: 1.2x), with the DMO eventually allotting N485.50 billion (bid-to-cover: 1.9x).  

The stop rate on the JUN-2032 and MAY-2033, which were on-the-run last month, expanded by 41basis points and 90basis points to 16.15per cent and 16.64per cent, respectively. While the stop rate on the AUG-2030 printed 16per cent.

In addition,  the FGN ’s April 2026 bond auction attracted a total of N948 billion in bids—well above the N700 billion offered—across three maturities for the months of April 2026.

According to the DMO, the auction was conducted on April 27, 2026 and covered the re-opening of the 17.945% FGN August 2030 bond, the 17.95% FGN June 2032 bond, and the 22.60% FGN January 2035 bond.  Investor participation was broad-based, but demand was heavily skewed toward the long end of the curve, reflecting continued preference for higher yields in a tight monetary environment.

The auction results show strong but selective demand across the three instruments, with the 10-year paper dominating subscriptions.

The data by DMO showed  that investor demand was strongest at the long end, while shorter tenors saw relatively softer participation, particularly the 5-year bond which was under-subscribed relative to its offer size.

The widespread bid rates, ranging from 15.00 per cent to 22.60 per cent, also point to divergent investor expectations around inflation, monetary policy direction, and future interest rate movements.

However, marginal rates ultimately cleared at 16.30per cent for the 2030 bond, 16.50 per cent for the 2032 bond, and 16.59 per cent for the 2035 bond, indicating the debt office maintained tighter pricing discipline than peak bids suggested.

The N6.8 trillion total subscription in the first four months of 2026  by investors is a reflection that investors, most especially the Pension Fund Administrators (PFAs) tend to invest in risk-free instruments, of which FGN Bond and Nigerian Treasury Bills (NTB) offer to the investing public. 

As gathered by THISDAY, PFAs have played a critical role in partaking in the FGN bond market.

Also gathered that the DMO, since the beginning of the year, has continually re-opened some FGN Bonds amid modest interest rates in its moves 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 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.