The Federal Government of Nigeria (FGN) has significantly exceeded its target in the January 2026 sovereign bond auction, allotting a total of ₦1.54 trillion well above the initial ₦900 billion offer in a strong demonstration of investor confidence in government securities.
Nairametrics The auction, conducted on January 26, 2026, was managed by the Debt Management Office (DMO) as part of the government’s domestic borrowing strategy to fund budgetary needs amid a tight fiscal environment.
Settlement for successful bids is scheduled for January 28, 2026.
Oversubscription Across All Instruments Investors displayed strong demand across all maturities, leading to substantial oversubscription and higher than-anticipated total allotments:
18.50% FGN February 2031 BondOffer: ₦300 billionBids received: ₦514.45 billionAllotted: ₦398.19 billion (including ₦17.50 billion in non-competitive allotments) 19.00% FGN February 2034 BondOffer: ₦400 billionBids received: ~₦1.01 trillionAllotted: ₦576.33 billion (including ₦113.22 billion in non-competitive) �Nairametrics22.60% FGN January 2035 BondOffer: ₦200 billionBids received: ₦731.40 billionAllotted: ₦570.16 billion (from 176 successful bids)
Despite the wide range of bid rates with some investors bidding as high as 25.90% on the long-dated instrument marginal rates at which bonds cleared were much lower, settling between 17.50% and 17.62% across the three instr
The DMO has maintained that while allotments were determined by these marginal rates, the original coupon rates of 18.50,%, 19.00%, and 22.60% will remain effective over the life of the respective bonds.
Market and Policy ImplicationsThe robust turnout and oversubscription reflect sustained investor confidence in Nigerian government securities, even in a high-interest-rate environment and in the face of broader macroeconomic uncertainties.
Analysts attribute the strong demand partly to the perceived safety of sovereign instruments and the attractive yields on offer relative to other fixed-income options.
This performance aligns with recent trends in the domestic debt market, where government securities continue to attract significant interest from both institutional and high-net-worth investors.
The outcome also highlights the critical role that FGN bonds play in the country’s financing strategy and in establishing benchmark yields for other fixed-income instruments in the Nigerian capital market.
Background: January Offer Details Before the auction, the DMO had announced its plan to offer ₦900 billion worth of Federal Government of Nigeria bonds to investors through the reopening of three existing securities, each priced at ₦1,000 per unit with a minimum subscription requirement and associated coupon rates between 18.50% and 22.60%.
These auctions form part of the government’s monthly issuance cycle and serve as a key mechanism for managing the country’s debt profile while providing investors with secure, long-term investment options.
Source: Nairametrics
