The Federal Government of Nigeria raised a total of N1.5 trillion in its first bond auction of 2026, signaling strong investor confidence in government securities. The Debt Management Office (DMO) offered N900 billion across three bonds—February 2031, February 2034, and January 2035—marking a significant increase from the N460 billion offered in December 2025. Analysts say the move reflects a front-loaded borrowing strategy for the first quarter of the year.
Investor enthusiasm was clear as subscriptions reached approximately N2.3 trillion, giving a bid-to-cover ratio of 2.5 times, compared with 1.94 times in the previous auction. From this high demand, the DMO allotted N1.5 trillion, achieving a sales-to-bid ratio of 1.72 times—well above December’s 1.3 times—highlighting the market’s robust appetite for government debt.
Medium- to long-term maturities drew the most attention. The February 2034 bond attracted N1.0 trillion in bids, of which N576.3 billion was allotted, while the January 2035 bond received N731.4 billion in bids and resulted in N570.2 billion in sales. The shorter-dated February 2031 bond also performed solidly, drawing N514 billion in bids against an offer of N300 billion and a final allotment of N398.2 billion. Non-competitive allotments added further weight, with N17.5 billion and N113.2 billion allotted to the February 2031 and January 2035 bonds, respectively.
Stop rates settled firmly between 17 and 18 percent, reflecting sustained demand. The February 2031 bond cleared at 17.62 percent, the February 2034 at 17.50 percent, and the January 2035 at 17.52 percent. Analysts noted that investors’ willingness to lock in yields at these levels reflects confidence in stable macroeconomic conditions and ongoing liquidity support from the Central Bank.
Secondary market activity mirrored the primary market’s strength, with reinvestment flows supporting yields, particularly for mid- and long-term instruments. In contrast, Nigeria’s Eurobond market was softer, with average yields rising slightly to 7.07 percent due to cautious offshore investor sentiment. Experts at Cowry Asset Management believe domestic demand will continue to stabilize the local bond market, while the Eurobond segment may face upward pressure if global investor sentiment remains fragile.
source: The guardian