The Federal Government raised a total of N2.69tn from the domestic bond market in the first quarter of 2026, supported by strong investor appetite that pushed total subscriptions far above the amount offered. Data from the Debt Management Office showed that subscriptions reached N5.88tn, reflecting an oversubscription level of more than 200 per cent.
During the period, the government offered N2.45tn worth of bonds, but only about 45.64 per cent was allotted, indicating a cautious approach to how much of investor demand was accepted. On a competitive basis, the allotment rate was slightly lower at 43.42 per cent, underscoring tighter borrowing decisions despite strong liquidity in the market.
A month-by-month breakdown showed that January 2026 recorded the highest borrowing activity, with the government offering N900bn and attracting subscriptions of N2.25tn. February followed with the strongest demand of the quarter at N2.70tn in subscriptions, although allotments dropped sharply. By March, both offer size and subscriptions declined, signalling a slowdown in market activity toward the end of the quarter.
Year-on-year comparisons revealed a significant rise in borrowing. The government raised N750.08bn more than in Q1 2025, while subscriptions more than doubled, increasing by over 107 per cent. However, the proportion of subscriptions accepted dropped from 68.32 per cent in 2025 to 45.64 per cent in 2026, reflecting a more restrained issuance strategy despite rising investor interest.
The report also showed a notable decline in borrowing costs, with marginal rates falling to between 15.50 per cent and 17.62 per cent across the quarter, compared to higher levels in 2025. Analysts say the trend points to improved investor confidence and relatively favourable market conditions, even as concerns persist over the government’s growing reliance on domestic debt to finance fiscal needs.
source: punch