The Debt Management Office (DMO) allotted N1.22 trillion to the market at its October 19, 2026, Federal Government of Nigeria (FGN) bond public sale, about 63.5% greater than the N748.64 billion allotted in (*19*).
It additionally made N800 billion in non-competitive allotments, cut up equally between the February 2034 and (*19*) 2036 bonds, bringing complete allotments to N2.02 trillion.
The public sale outcomes confirmed that the DMO accepted larger yields on the 10-year and 15-year bonds to lift the quantity.
The company reopened three bonds and provided N1.75 trillion in complete, whereas buyers submitted bids price the identical quantity.
The N1.22 trillion market allotment resulted in a bid-to-cover ratio of 1.4x, with the DMO rejecting about N523.58 billion, or roughly 30% of subscriptions.
FGN Bond yields rise by as much as 50 foundation factors:
The stop rates on the (*19*) 2036 and June 2038 bonds, which had been on-the-run at the earlier public sale, rose by 50 foundation factors (bps) and 34bps to 17.29% and 17.19%, respectively. The February 2034 bond settled at 16.99%.
The outcomes for the three reopened bonds confirmed totally different ranges of investor demand and allotment.
- 19.00% FGN FEB 2034: Bids reached N304.08 billion towards a proposal of N500 billion, representing a 0.61x bid-to-offer ratio. The DMO allotted N92.14 billion to the market, about 30% of bids, with bid rates starting from 16.00% to 19.00%.
- 16.79% FGN SEP 2036: Investors submitted N925.35 billion in bids towards N800 billion provided, representing a 1.16x ratio. The DMO allotted N781.31 billion, about 84% of bids, at a stop fee of 17.29%, up from 16.79% in (*19*).
- 15.45% FGN JUN 2038: Bids totalled N518.32 billion towards N450 billion provided, representing a 1.15x ratio. The DMO allotted N350.72 billion at 17.19%, in contrast with 16.85% in (*19*).
The figures present that the DMO accepted larger rates on the longer-dated bonds whereas allocating a lot of the (*19*) 2036 bond’s profitable funding to the market.
FGN Bond demand rises as yields rebound
The October public sale attracted 443 bids, of which 274 had been profitable, in contrast with 441 bids and 204 profitable bids in (*19*). Total subscriptions rose by about 17% from N1.49 trillion in September auction.
The June 2038 bond additionally recorded a reversal in its latest yield trajectory.
- The bond cleared at 18.40% in July, 17.79% in August and 16.85% in September.
- Its October stop fee of 17.19% represents a rebound, though it stays 60bps beneath the August degree.
- The February 2034 bond was undersubscribed and was not a part of the DMO’s third-quarter calendar.
- The highest bids reached 19.00% for the February 2034 bond and 18.50% for the opposite two bonds, above their respective stop rates.
Nairametrics beforehand reported that the DMO offered N1 trillion in September, comprising a brand new 10-year bond and the June 2038 reopening. In August, the company allotted N1.56 trillion throughout three bonds on demand of N1.73 trillion.
Rates had fallen following the Central Bank of Nigeria’s Monetary Policy Committee choice to chop the benchmark rate of interest by 350bps to 23% on (*19*) 22. However, the DMO rejected about 74% of Treasury invoice bids on October 14 and raised the one-year stop fee to fifteen.90% from 15.85%, its first enhance since August.
DMO indicators larger borrowing prices
The October public sale means that the DMO is keen to pay barely extra to lift bond funding after weeks of falling rates. Its strategy was extra accommodating than within the Treasury payments market, the place it restricted allotments to withstand rising rates.
- The enhance in stop rates on the (*19*) 2036 and June 2038 bonds signifies that buyers demanded larger yields at the public sale.
- The allotment figures present that the DMO continued to handle how a lot it accepted at totally different rates.
The key take a look at is whether or not yields proceed to rise at the subsequent public sale or stabilise round present ranges.
