Investor interest for both the freshly issued 10-year instrument and the reopened 15-year bond was strong, and the Federal Government generated N748.64 billion from its September 2026 domestic bond sale.
Out of the N400 billion offered on the 10-year FGN bond, the Debt Management Office allocated N288.83 billion at a marginal rate of 16.79 percent.
For the 10-year paper, investors put in bids totalling N546.90 billion, increasing demand by 36.7%.
Investor enthusiasm for longer-dated government securities appears to have improved, as seen by the increased demand for the new 10-year instrument and the yield’s decrease in comparison to recent borrowing levels.
Investors bid N947.83 billion for the 15-year FGN bond, which was offered as an N600 billion reopening.
The DMO allocated N460.01 billion from the reopening at a marginal rate of 16.85 percent, which is substantially less than the previous auction’s rate of 17.79 percent.
In total, investors wanted N1.49 trillion for the two securities, which is around 49.5% more than the DMO’s N1 trillion offer.
However, approximately N746.59 billion of the bids were rejected after the debt office allocated N748.64 billion.
The auction results show that the DMO was picky about the amount of debt to issue, even while demand for Nigerian government securities remained high.
Even though borrowing costs are still high, the 15-year bond’s declining marginal rate also suggests that investors’ necessary returns on longer-term government debt are gradually easing.
The Federal Government continues to rely significantly on the domestic debt market to manage its debt portfolio and finance its fiscal needs, as seen by the most recent auction.
Investors in the secondary bond market, where changes in government bond yields affect the pricing of various fixed-income assets, such as corporate bonds, treasury bills, and other debt instruments, will also be closely monitoring the auction’s conclusion.
