DMO raises bond rates as investors bid ₦1.747tn

By Boluwatife Oshadiya | October 20, 2026

Key Points

• The Debt Management Office allotted approximately ₦1.21 trillion in FGN bonds at higher rates across three maturities
• Total subscriptions reached ₦1.747 trillion, slightly below the ₦1.75 trillion offered at the October auction
• The 2034 bond attracted bids below its ₦500 billion target, while the longer-dated bond issues drew subscriptions above their respective offers

Main Story

The Debt Management Office (DMO) raised the rates on Federal Government of Nigeria (FGN) bonds at its October auction on Monday, allotting approximately ₦1.21 trillion as investors submitted ₦1.747 trillion in bids against a ₦1.75 trillion offer.

The auction covered three reopened naira-denominated bonds maturing in February 2034, September 2036 and June 2038. The DMO offered ₦500 billion, ₦800 billion and ₦450 billion, respectively. Total subscriptions fell slightly short of the combined offer, leaving the auction marginally undersubscribed.

Demand was weakest for the February 2034 bond, which attracted ₦304.08 billion in subscriptions against the ₦500 billion target. The DMO allotted ₦78.36 billion at a rate of 16.99%, up from 15.50% at the previous auction.

The September-tenor bond attracted ₦925.35 billion in subscriptions against an ₦800 billion offer. The DMO allotted ₦781.31 billion at 17.29%, compared with 16.79% at the previous auction. The supplied report identifies this bond as maturing in September 2036 in the offer schedule but later refers to it as expiring in September 2026. That maturity date requires verification against the official auction results before publication.

The June 2038 bond attracted ₦518.32 billion in bids, exceeding its ₦450 billion target. The DMO allotted ₦350.72 billion at 17.19%, up from 16.85% at the previous auction.

The supplied market commentary links the higher rates to investor demands for stronger returns following a reduction in the Central Bank of Nigeria’s benchmark interest rate to 23% and a September inflation reading of 14.63%. Those figures imply a positive nominal policy-rate gap of 8.37 percentage points, but the policy rate is not the same as the yield investors receive on individual bonds.

What’s Being Said

The DMO’s auction results provide the reported subscription, allotment and rate figures, but the supplied material contains no direct statement from the debt office explaining the rate increases. It also provides no named independent analyst’s assessment. Those comments should be obtained rather than attributed to unnamed market participants or presented as direct quotations.

What’s Next

• Investors will assess the higher auction rates against inflation, monetary policy and alternative investment returns.
• The DMO’s subsequent borrowing activity will help indicate whether higher rates persist at future auctions.
• The September-tenor bond’s maturity date should be checked against the official DMO auction notice before the story is published.

The Bottom Line:

The auction shows that the government attracted substantial demand for its domestic debt but had to offer higher rates to secure allotments. The difference between the three bonds’ subscription levels also suggests that investor demand varied by maturity, making the composition of borrowing as important as the headline amount raised.