FGN Bond Auction May 2026: DMO Announces N600 Billion Issuance to Finance Government Spending

The Debt Management Office has announced a fresh N600 billion Federal Government of Nigeria bond auction scheduled for May 2026 on behalf of the Federal Government of Nigeria. The move is part of efforts to finance fiscal obligations, support budget implementation, and deepen activity in the domestic capital market amid strong investor demand for fixed-income assets.

According to the offer circular, the auction will take place on May 18, 2026, with settlement planned for May 20, 2026. The issuance consists of two re-opened Federal Government of Nigeria (FGN) bond instruments, each valued at N300 billion, designed to raise long-term funding while maintaining liquidity in the secondary market.

The bonds on offer include a N300 billion 22.60% FGN January 2035 (10-year re-opening) and a N300 billion 16.2499% FGN April 2037 (20-year re-opening). The bonds are priced at N1,000 per unit, with a minimum subscription of N50,001,000 and additional bids allowed in multiples of N1,000. Coupon rates remain fixed due to their re-opening structure, while investors will be allotted based on yield-to-maturity at auction clearance.

Interest payments will be made semi-annually, and principal repayment will be structured as a bullet payment at maturity. The bonds are backed by the full faith and credit of the Federal Government, listed on both the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, and qualify as liquid assets for banks. They also enjoy tax incentives under relevant Nigerian investment laws, making them attractive to institutional investors such as pension funds.

Compared to April 2026, when the DMO offered N700 billion across three instruments, the current N600 billion offer reflects a more cautious borrowing stance. The adjustment is seen as part of a broader strategy to manage debt servicing costs while leveraging improved domestic liquidity conditions. Investors are expected to participate through approved Primary Dealer Market Makers, including major banks such as Access Bank, First Bank, Zenith Bank, UBA, GTBank, Ecobank, Stanbic IBTC, and Standard Chartered Bank Nigeria.

source: nairametrics