DMO Raises FGN Bond Rates, Cuts Allotment to N485.5 Billion

Abuja, Nigeria – The Debt Management Office has increased borrowing costs at its latest Federal Government of Nigeria (FGN) bond auction, hiking stop rates on re‑issued bonds and cutting the total allotment to N485.50 billion.

The move comes despite strong investor demand, as the government signals a more conservative approach amid rising debt‑cost concerns.

Okay News reports that the March 30 auction re‑opened the AUG‑2030, JUN‑2032, and MAY‑2033 bonds, attracting total bids of N931.50 billion against an offer of N750 billion. The DMO chose to allot only N485.50 billion, with the MAY‑2033 bond receiving the largest share (N332.71 billion) out of N462.21 billion in subscriptions. The AUG‑2030 and JUN‑2032 bonds saw N251.43 billion and N217.87 billion in bids respectively, but the DMO allotted just N88.80 billion and N64 billion, reflecting a more selective placement.

Stop rates jumped across the curve, indicating higher borrowing costs. The JUN‑2032 bond cleared at 16.15%, up 41 basis points from the previous auction, while the MAY‑2033 bond rose 90 basis points to 16.64%. The AUG‑2030 bond cleared at 16.00%, all above the 15.74% at which the 2032 and 2033 issues had cleared in earlier auctions. These increases suggest investors are pricing in stronger risk premia, linked to inflationary pressures and fiscal uncertainty, even as liquidity remains ample.

Although recent primary‑market tenders had seen yields trending lower and the CBN easing Treasury‑bill rates, the latest DMO auction marks a shift in tone. By raising stop rates while still receiving more than double the required subscriptions, the DMO is effectively betting that the market will accept higher yields in exchange for continued access to sovereign paper. The result points to a tightening of the government’s borrowing dynamics, where higher costs may persist unless investors see clearer progress on fiscal discipline and macroeconomic stability.