Abuja, Nigeria – The Federal Government attracted stronger investor demand at its February 2026 bond auction, with total subscriptions climbing to N2.70 trillion, even as the Debt Management Office reduced allotments and marginal rates declined across all tenors.
Okay News reports that results released by the DMO show N800 billion was offered across three reopened instruments at the February 23 auction. The 7-year 17.95 percent FGN JUN 2032 bond recorded subscriptions of N851.59 billion against N400 billion offered. The 9-year 19.89 percent FGN MAY 2033 attracted N874.69 billion for N300 billion on offer, while the 10-year 19.00 percent FGN FEB 2034 received N972.93 billion in bids for N100 billion offered.
Combined subscriptions reached N2.70 trillion for N800 billion offered, translating to a bid-to-offer ratio of about 3.4 times. This compares to the January auction which recorded total subscriptions of N2.25 trillion against N900 billion offered, representing a N446 billion increase in demand month-on-month. Despite stronger demand, the DMO allotted only N524.28 billion in February, indicating that the Federal Government deliberately moderated domestic borrowing volumes despite ample market liquidity.
Pricing conditions improved significantly in February, with marginal rates settling at 15.74 percent for both the 7-year and 9-year bonds, and 15.50 percent for the 10-year bond. In January, marginal rates were notably higher at 17.62 percent for the 7-year bond and 17.52 percent for the 10-year bond. The 7-year stop rate declined by 188 basis points month-on-month, while the 10-year rate fell by 202 basis points compared to January’s comparable instrument.
Bid ranges also reflected reduced yield pressure, with February bids on the 7-year bond ranging between 14.90 percent and 20.00 percent. In January, the upper end of the range on the 10-year bond reached 25.90 percent, highlighting the higher yield volatility seen in the previous month. In both auctions, the DMO maintained the original coupon rates on the instruments, meaning the stop rate reflects the clearing yield for successful bids rather than a change in coupon structure.
February’s auction signals improving funding conditions for the Federal Government, with investor demand strengthening, yields moderating sharply, and the DMO exercising restraint by issuing significantly less than in January. The strong appetite for government bonds despite lower yields suggests sustained confidence in Nigeria’s fiscal outlook and monetary policy direction. Continued demand for government bonds will help the government finance its deficit at more affordable costs.
