The Federal Government of Nigeria (FGN) recorded a marked surge in investor interest at its February 2026 Federal Government of Nigeria (FGN) bond auction, with total subscriptions reaching approximately ₦2.70 trillion despite a significant reduction in yields and a deliberate scaling-back of allotments by the Debt Management Office (DMO).
Results released following the February 23 auction show the oversubscription reflects sustained appetite among institutional and retail investors for sovereign fixed-income instruments even as pricing pressures eased.
Nairametrics Three reopened FGN bond instruments were offered at the auction: the 17.95 % FGN June 2032 (7-year), 19.89 % FGN May 2033 (9-year), and 19.00 % FGN February 2034 (10-year).
Although the government put ₦800 billion up for bids, demand far exceeded supply across all three tenors. The 2032 paper attracted ₦851.59 billion in bids against ₦400 billion on offer; the 2033 bond saw ₦874.69 billion in bids for ₦300 billion available; and the 2034 issuance drew ₦972.93 billion in subscriptions despite only ₦100 billion being offered.
Combined, this resulted in a bid-to-offer ratio of about 3.4 times.
Although investor demand was robust, the DMO exercised restraint in allocations, ultimately allotting approximately ₦524.28 billion across the three instruments.
This represented a significant drop from January’s competitive allotments of about ₦1.54 trillion, indicating a strategic moderation in domestic borrowing despite ample market liquidity.
Pricing conditions at the auction showed a notable improvement compared to the previous month. Marginal rates declined sharply, settling at 15.74 % for both the 7-year and 9-year bonds and 15.50 % for the 10-year instrument.
In contrast, January’s stop rates were significantly higher, with the 7-year at 17.62 %, the 10-year at 17.50 %, and the January 2035 paper at 17.52 %.
On a month-on-month basis, the reduction in marginal rates ranged from 176 basis points to 202 basis points, underscoring easing yield pressures and improved funding conditions.
Bid ranges also tightened, with the 7-year bond bids in February spanning 14.90 % to 20.00 %, compared with a higher volatility range in January.
The strong subscription level in February reflects a broader trend of heightened investor confidence in FGN debt instruments amid a stable demand for risk-free assets.
Additional reporting indicates that total FGN bond subscriptions in the first two months of 2026 approached ₦4.95 trillion, more than double the levels recorded in the same period a year earlier, driven by sustained interest from pension fund administrators and other fixed-income investors.
Overall, the February auction demonstrates a resilient domestic debt market with strong demand for government securities even as the government deliberately manages borrowing volumes and cost of funds.
Source: Nairametrics
