DMO raises ₦2 trillion through October bond auction

By Boluwatife Oshadiya | October 26, 2026

Key Points

• The Debt Management Office raised ₦2 trillion through competitive and non-competitive bond allotments in October, up from ₦1.6 trillion in September
• Yields increased across the February 2034, September 2036 and June 2038 bonds as the government offered higher returns to investors
• Cowry Asset Management warned that increased bond issuance could sustain upward pressure on government borrowing costs

Main Story

Nigeria’s Debt Management Office (DMO) raised ₦2 trillion through competitive and non-competitive allotments of reopened government bonds in October, compared with ₦1.6 trillion in September, as the government increased domestic borrowing to help finance its budget deficit.

According to Cowry Asset Management Limited, the DMO offered about ₦1.8 trillion across the February 2034, September 2036 and June 2038 bonds, compared with ₦1 trillion in September. Total subscriptions reached ₦1.7 trillion, up from ₦1.5 trillion at the previous auction, while the bid-to-offer ratio fell to 1.0 times from 1.5 times.

The DMO awarded ₦1.2 trillion to competitive bidders, compared with ₦749 billion in September. A further ₦800 billion was raised through non-competitive allotments, below the ₦850 billion recorded in September. Together, the two channels brought total October funds raised to ₦2 trillion, according to the figures supplied.

Clearing yields rose across all three maturities. The February 2034 bond cleared at 16.99%, up from 15.50% at its previous issuance. The September 2036 bond yield increased by 50 basis points to 17.29%, while the June 2038 bond yield rose by 34 basis points to 17.19%.

The higher yields indicate that investors were offered stronger returns as the DMO expanded bond supply. The lower bid-to-offer ratio, despite increased subscriptions, suggests demand did not rise in proportion to the larger offer.

The additional borrowing provides funding for the government but could also raise the cost of servicing domestic debt. Higher government bond yields may influence secondary-market prices and how investors allocate funds between sovereign debt and other fixed-income instruments.

What’s Being Said

Cowry Asset Management cautioned that the expanded issuance could increase pressure on borrowing costs, stating: “While we think this approach supports the government’s domestic borrowing programme, the increased volume of issuance also raises the potential for sustained upward pressure on borrowing costs as investors reassess the returns required to absorb additional government debt.”

The firm also said the higher clearing yields reflected the DMO’s need to offer more competitive returns to attract funds amid increased supply. No separate direct comment from the DMO or an independent analyst was included in the supplied material.

What’s Next

• Investors will monitor subsequent DMO bond offers and auction results for signs of whether issuance remains elevated
• Secondary-market yields and bond prices will indicate how investors respond to the higher clearing rates
• Future auction subscriptions and bid-to-offer ratios will help show whether investor demand is keeping pace with government borrowing needs

The Bottom Line:

The October auction expanded the government’s domestic funding while raising the returns investors require to absorb its debt. If elevated issuance continues, borrowing costs could remain under pressure, with implications for government financing and fixed-income investment decisions.