DMO offers N1.75tn FGN bonds ahead of Monday's auction

The Debt Management Office (DMO) has offered N1.75 trillion in Federal Government of Nigeria (FGN) bonds for subscription ahead of Monday's 19 October 2026 auction, with settlement set for 21 October 2026, according to the DMO's October 2026 bond offer circular and reports on the auction.

The offer comprises three previously issued FGN bonds being reopened to investors. As set out in the circular, the tranches are N500 billion of the 19.00 per cent FGN February 2034 bond, N800 billion of the 16.79 per cent FGN September 2036 bond and N450 billion of the 15.45 per cent FGN June 2038 bond, bringing the total to N1.75 trillion. The DMO has fixed the unit of sale at N1,000, with a minimum subscription of N50,001,000 and additional subscriptions in multiples of N1,000.

Auction structure and terms

The reopening means successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the auction volume, plus any accrued interest. Interest on all three tranches is payable semi-annually, with the principal due in full on their respective maturity dates. The DMO has listed the bonds on the Nigerian Exchange (NGX) and the FMDQ Securities Exchange, and they qualify as securities in which trustees can invest under the Trustee Investment Act, as government securities eligible for tax exemption under the Companies Income Tax Act and the Personal Income Tax Act for pension funds and other qualified investors, and as liquid assets for banks' liquidity ratio calculations.

The bonds are backed by the full faith and credit of the Federal Government and charged on its general assets. For the auction, the DMO will allot the instruments at its discretion, with bids to be placed through the 14 designated Primary Market Dealers. The clarification on the size of the offer follows reports that some outlets had wrongly put the figure at N7.15 trillion; the correct amount in the October 2026 circular is N1.75 trillion.

Context of issuance

The October auction is the latest in the DMO's quarterly issuance calendar for the fourth quarter of 2026, which shows planned bond offers of N1.75 trillion for October, N2 trillion for November and N2 trillion for December. Against a backdrop of substantial domestic financing requirements, the reopening of these specific tenors allows the government to manage refinancing and new issuance efficiently while offering investors a range of maturities and coupon rates.

With yields across the curve attracting strong interest from domestic investors, the structure of the offer provides a mix of intermediate and longer-dated paper. The 19.00 per cent coupon on the February 2034 tranche, the 16.79 per cent on the September 2036 tranche and the 15.45 per cent on the June 2038 tranche reflect prevailing market rates at the time of the offer. The semi-annual interest payments and bullet repayment structure remain standard for FGN bonds, offering predictable cash flows for institutional investors.

Implications for the market

For investors, the auction comes at a time when fixed-income demand remains robust, but liquidity dynamics can be sensitive to auction sizes and timing. The listing on both NGX and FMDQ provides secondary market liquidity, while the tax-exempt status for pension funds helps sustain demand. For the government, the planned issuance supports domestic borrowing to meet budgetary needs while the DMO continues to focus on extending maturities and maintaining a well-structured debt profile through its regular bond calendar.

The settlement date of 21 October 2026 gives successful bidders clarity on payment and delivery, while the minimum subscription threshold ensures broad participation from qualified institutional investors. With the auction set for Monday, 19 October 2026, market attention will be on the subscription level and clearing yields as an indicator of investor appetite for longer-dated FGN paper.