Strong appetite for 2037 bond signals growing investor confidence despite shifting interest rate environment….
The Debt Management Office has allotted a total of ₦614.5 billion in its May 2026 Federal Government bond auction, with investors showing stronger demand for long-term securities amid continued government borrowing to finance public spending and budget obligations.
Details released by the Debt Management Office on Tuesday showed that the Federal Government reopened two existing bond instruments during the auction conducted on May 18, 2026.
The instruments offered were the 22.60% FGN JAN 2035 bond and the 16.2499% FGN APR 2037 bond, with both initially offered at ₦300 billion each.
However, investor appetite tilted heavily toward the longer-dated APR 2037 bond, which attracted massive institutional participation and a significant volume of non-competitive bids.
According to the auction results, the 22.60% FGN JAN 2035 bond received total subscriptions worth ₦262.23 billion from 130 investor bids, out of which 79 were successful.
The DMO eventually allotted ₦137.67 billion on the bond.
The instrument, which has a remaining tenor of eight years and eight months, recorded bid rates ranging between 15.00 per cent and 22.60 per cent, while the marginal rate closed at 17.00 per cent.
The agency stated that successful investors were allotted the bond at the marginal rate of 17.00 per cent, although the original coupon rate of 22.60 per cent remains unchanged.
Investor demand was considerably stronger for the 16.2499% FGN APR 2037 bond, which emerged as the standout instrument in the auction.
The bond attracted 135 bids, with 96 accepted by the DMO. Total subscriptions stood at ₦253.94 billion, while an additional ₦280 billion came in through non-competitive bids.
As a result, total allotment on the APR 2037 bond climbed to ₦476.84 billion — significantly above the initial ₦300 billion offer size.
The bond, which has a remaining tenor of 10 years and 11 months, recorded bid rates ranging from 14.00 per cent to 18.49 per cent, while the marginal rate settled at 17.04 per cent.
Successful bids on both instruments were allotted at their respective marginal rates of 17.00 per cent and 17.04 per cent.
Despite the allotment yields, the DMO clarified that the original coupon structures of 22.60 per cent for the JAN 2035 bond and 16.2499 per cent for the APR 2037 bond remain intact.
The settlement date for both instruments has been fixed for May 20, 2026.
Federal Government bond auctions remain one of Nigeria’s primary tools for raising long-term domestic funding, financing fiscal deficits and supporting key government expenditure programmes.
The strong investor participation recorded in the latest auction highlights sustained appetite for sovereign debt instruments, particularly among institutional investors seeking stable long-term returns in the fixed-income market.
