Nigeria’s Debt Management Office (DMO) has allotted a combined N1.56 trillion in Federal Government of Nigeria (FGN) bonds after investors submitted bids worth N1.73 trillion at its August 17, 2026 auction. The strong turnout highlights continued investor appetite for Nigerian government securities, particularly longer-term bonds, even as interest rates begin to ease.
The DMO had initially offered N1.1 trillion across three reopened bonds, but strong participation pushed total demand significantly higher. Investors submitted 595 bids, with 226 eventually successful. The settlement for the bonds is scheduled for Wednesday, August 19, while the 15.45% FGN June 2038 bond emerged as the clear favourite, attracting the largest volume of subscriptions and receiving the biggest allocation.
The August auction also showed that bond yields are gradually coming down. The marginal rates settled at 17.15% for the 2035 bond, 17.19% for the 2037 bond and 17.79% for the 2038 bond. These figures are notably lower than the rates recorded in June and July, when comparable bonds cleared above 18%. The decline suggests that investors may be positioning for further moderation in yields as expectations around Nigeria’s fixed-income market continue to evolve.
The 2038 bond was the standout performer, attracting N821.32 billion in bids from 225 investors. The DMO ultimately allotted more than N1.37 trillion to the instrument when competitive and non-competitive allocations were combined. The unusually large non-competitive allocation played a major role in pushing total allotments above the original N1.1 trillion offer, showing just how strong demand was for longer-dated government debt.
The latest results reinforce the Federal Government’s continued reliance on domestic borrowing to support its fiscal needs and public spending. For investors, FGN bonds remain an important fixed-income option, offering regular coupon payments and repayment of principal at maturity. With the DMO’s Q3 2026 bond programme continuing into September, market participants will be watching closely to see whether demand remains strong and whether bond yields continue their downward trend.
source: nairametrics
