Investor interest in Federal Government of Nigeria (FGN) bonds surged in February 2026, with total subscriptions hitting N2.70 trillion, reflecting strong appetite even as the Debt Management Office (DMO) reduced allotments. The February auction showed that demand continues to outpace supply, highlighting the attractiveness of government debt instruments in the current market.
The DMO offered N800 billion across three reopened instruments: the 17.95% FGN JUN 2032, 19.89% FGN MAY 2033, and 19.00% FGN FEB 2034 bonds. The 7-year 2032 bond received N851.59 billion in bids, the 9-year 2033 bond attracted N874.69 billion, and the 10-year 2034 bond drew N972.93 billion. Overall, the bid-to-offer ratio reached 3.4 times, up from 2.5 times in January, marking a N446 billion month-on-month rise in investor demand.
Despite the strong subscriptions, the DMO allotted only N524.28 billion, significantly lower than January’s N1.54 trillion. Allocations included N188.14 billion for the 2032 bond, N208.63 billion for the 2033 bond, and N127.51 billion for the 2034 bond. Analysts say this deliberate moderation in domestic borrowing signals the government’s cautious approach, balancing fiscal needs against market liquidity.
February’s auction saw marginal rates drop by up to 202 basis points. The 7- and 9-year bonds settled at 15.74%, while the 10-year bond ended at 15.50%, down from January’s rates above 17%. Bid ranges also narrowed, reflecting lower yield pressure, with the 7-year bond ranging from 14.90% to 20.00%. The DMO maintained original coupon rates, meaning these declines reflect clearing yields rather than adjustments in bond structure.
The February results indicate a healthier funding environment for the Federal Government. Investor demand remains robust, yields have moderated, and the DMO’s restrained issuance reduces borrowing costs. Market watchers see this as a signal of stabilizing domestic debt conditions, offering an encouraging backdrop for Nigeria’s fiscal planning in 2026.
source: nairametrics