By Adeola Kunle
The Federal Government's July 2026 bond auction attracted overwhelming investor interest, with total subscriptions climbing to ₦1.74 trillion, significantly exceeding the ₦1.2 trillion worth of bonds offered by the Debt Management Office.
Figures released by the DMO on Tuesday showed that demand surpassed the amount on offer by approximately ₦538.66 billion, underscoring sustained investor confidence in Federal Government securities.
The auction involved the reopening of three existing bond instruments, namely the 22.60% FGN January 2035 bond, the 16.2499% FGN April 2037 bond and the 15.45% FGN June 2038 bond. Each of the three instruments had an offer size of ₦400 billion.
Among the three, the 16.2499% FGN April 2037 bond generated the strongest investor interest, attracting 211 bids valued at ₦665.19 billion. Following the evaluation process, 126 bids were successful, resulting in an allotment of ₦381.46 billion.
The 22.60% FGN January 2035 bond also recorded robust demand, receiving 184 bids with a combined value of ₦555.47 billion. Out of these, 90 bids were accepted, while investors were allotted ₦245.73 billion.
Similarly, the 15.45% FGN June 2038 bond drew 161 bids amounting to ₦518 billion. The DMO approved 92 successful bids and allotted ₦302.13 billion. The instrument also included a non-competitive bid valued at ₦50 billion.
Overall, the Debt Management Office allotted ₦929.32 billion across the three reopened bond instruments.
According to the auction results, the January 2035, April 2037 and June 2038 bonds were allotted at marginal rates of 18.3400 per cent, 18.3500 per cent and 18.4000 per cent respectively, while retaining their original coupon rates of 22.60 per cent, 16.2499 per cent and 15.45 per cent.
The DMO fixed July 22, 2026, as the settlement date for the successful bond subscriptions.
The January 2035 bond has an outstanding maturity period of eight years and six months, while the April 2037 and June 2038 instruments have remaining maturities of 10 years and nine months, and 11 years and 11 months respectively.
Federal Government bonds are long-term debt securities issued by the Debt Management Office on behalf of the Federal Government to finance budget deficits and critical infrastructure projects. They also provide investors with fixed-income investment opportunities.
Monthly bond auctions conducted by the DMO are regarded as important indicators of investor confidence, market liquidity and prevailing interest rate expectations within Nigeria's financial system.
ADEOLA KUNLE
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