The Debt Management Office (DMO) has announced plans to raise N800 billion through the Federal Government’s February 2026 bond auction, marking a significant year-on-year increase in domestic borrowing, despite being slightly lower than January’s record offer.
Details contained in the bond offer circular released on Monday show that the issuance will comprise N400 billion of the 17.95 per cent FGN June 2032 (seven-year re-opening), N300 billion of the 19.89 per cent FGN May 2033 (10-year re-opening), and N100 billion of the 19.00 per cent FGN February 2034 (10-year re-opening).
The auction is scheduled for February 23, 2026, with settlement expected two days later on February 25.
The planned N800 billion issuance represents a sharp rise compared with February 2025, when the DMO offered N350 billion—consisting of N200 billion of the 19.30 per cent FGN April 2029 and N150 billion of the 18.50 per cent FGN February 2031 bonds. The latest offer therefore reflects a year-on-year increase of N450 billion, equivalent to a 128.6 per cent surge.
Analysts note a clear shift in the maturity profile of the government’s domestic debt strategy. Unlike the February 2025 issuance, which included a five-year instrument, the 2026 offer is entirely concentrated on seven-year and 10-year tenors, signalling an effort to lengthen debt maturity and reduce short-term refinancing risks.
Borrowing costs, however, remain elevated. While the seven-year bond carries a coupon of 17.95 per cent, slightly lower than comparable levels last year—the 10-year instruments are priced at 19.00 per cent and 19.89 per cent, reflecting the prevailing high interest rate environment.
On a month-on-month basis, the February offer is N100 billion lower than January’s N900 billion issuance, representing an 11.1 per cent decline. In January, the DMO offered N300 billion of the 18.50 per cent FGN February 2031, N400 billion of the 19.00 per cent FGN February 2034, and N200 billion of the 22.60 per cent FGN January 2035 bonds.
Notably, the seven-year coupon has declined from 18.50 per cent in January to 17.95 per cent in February, while the January 10-year bond carried a significantly higher coupon of 22.60 per cent, compared with the sub-20 per cent rates attached to February’s long-dated instruments.
Overall, although February’s issuance is below January’s record level, it remains more than double the size of the corresponding offer last year, underscoring the Federal Government’s intensified domestic borrowing needs amid persistently high financing costs.
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