FGN Bonds Record 32% Oversubscription in May Auction

The Federal Government of Nigeria’s (FGN) bond auction for May 2026 recorded a strong investor appetite, with subscriptions exceeding offer levels by 32.8 per cent, according to the Debt Management Office (DMO).

The DMO disclosed on Tuesday that investors submitted bids worth N797.17 billion, which included a N280 billion non-competitive bid, against the N600 billion total bonds offered by the government. The final allotment rose significantly to N614.51 billion, compared to N276.8 billion in April, reflecting increased participation in the domestic debt market.

Two bond instruments were offered at the auction: a 10-year reopening of the 22.6 per cent FGN January 2035 bond and a 20-year reopening of the 16.25 per cent FGN April 2037 bond, each with an offer size of N300 billion.

Investor demand was particularly strong for the 20-year April 2037 bond, which attracted N533.94 billion in total bids from 96 successful applicants. The instrument accounted for the bulk of allotments, receiving N476.84 billion.

The January 2035 bond, on the other hand, received N137.67 billion in total allotments, reflecting comparatively lower demand but still indicating steady investor interest.

The DMO said clearing yields for the auction stood at 17 per cent for the January 2035 bond and 17.04 per cent for the April 2037 bond. The bonds were priced within a wide range during the auction, with the January 2035 instrument trading between 15 per cent and 22.6 per cent, while the April 2037 bond was priced between 14 per cent and 18.49 per cent.

Market analysts say the sustained oversubscription highlights continued investor confidence in Nigerian sovereign debt, driven by relatively high yields and expectations of stable returns in the fixed-income market.

Despite tight liquidity conditions and broader macroeconomic pressures, demand for government securities has remained resilient as investors seek safer instruments with attractive interest rates.

The result also signals the government’s continued reliance on the domestic debt market to finance fiscal obligations, even as borrowing costs remain elevated.

The DMO noted that the outcome reflects sustained participation from both local and institutional investors, underscoring the attractiveness of FGN bonds within the Nigerian financial system.