The Debt Management Office (DMO) has announced plans to raise N800 billion through its February 2026 Federal Government bond auction, marking a significant increase compared to the corresponding period in 2025, though slightly below the record N900 billion offered in January.
Details contained in the bond offer circular published on the agency’s website on Monday show that the issuance will comprise:
N400bn of 17.95% FGN JUN 2032 (seven-year re-opening)
N300bn of 19.89% FGN MAY 2033 (10-year re-opening)
N100bn of 19.00% FGN FEB 2034 (10-year re-opening)
This brings the total offer for February to N800bn.
The auction is scheduled for February 23, 2026, with settlement fixed for February 25, 2026.
Sharp Year-on-Year Increase
In February 2025, the DMO offered N350bn, comprising:
N200bn of 19.30% FGN APR 2029 (five-year re-opening)
N150bn of 18.50% FGN FEB 2031 (seven-year re-opening)
The planned N800bn issuance for February 2026 therefore represents a year-on-year increase of N450bn, translating to a 128.6 per cent rise. This means the Federal Government is seeking more than double the amount it offered in February last year.
Shift in Maturity Structure
The maturity profile of the new issuance indicates a strategic shift. While the February 2025 offer included a five-year instrument, the February 2026 bonds are concentrated entirely on seven-year and 10-year tenors.
This suggests an effort by the Federal Government to lengthen the average maturity of its domestic debt portfolio and reduce short-term refinancing pressures.
Pricing and Interest Rate Trends
Borrowing costs remain elevated despite slight adjustments.
The seven-year bond carries a coupon rate of 17.95 per cent, marginally lower than the 18.50 per cent attached to a comparable tenor in February 2025.
However, the 10-year instruments are priced at 19.00 per cent and 19.89 per cent, reflecting the prevailing high interest rate environment.
On a month-on-month basis, the February offer of N800bn is N100bn lower than the N900bn raised in January 2026 representing an 11.1 per cent decline.
In January 2026, the DMO offered:
N300bn of 18.50% FGN FEB 2031 (seven-year re-opening)
N400bn of 19.00% FGN FEB 2034 (10-year re-opening)
N200bn of 22.60% FGN JAN 2035 (10-year re-opening)
Notably, the seven-year coupon has declined from 18.50 per cent in January to 17.95 per cent in February. The January 10-year FGN JAN 2035 bond carried a significantly higher coupon of 22.60 per cent, compared to the 19.89 per cent and 19.00 per cent attached to the February 2026 10-year papers.
Elevated Domestic Borrowing Costs
Although the February issuance is lower than January’s record N900bn offer, it remains more than twice the size of the February 2025 auction and is priced at rates ranging between 17.95 and 19.89 per cent.
Taken together, the figures underscore the Federal Government’s continued reliance on the domestic bond market at relatively high interest rates, highlighting the sustained cost of domestic debt financing amid tight monetary conditions.
ELIJAH ADEYEMI
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