FGN bond demand rises to N2.70 trillion in February despite lower yields

2026-02-25 08:43:08

The Federal Government attracted stronger investor demand at its February 2026 bond auction, with total subscriptions climbing to N2.70 trillion, even as the Debt Management Office significantly reduced allotments and marginal rates declined across all tenors.

Results released by the Debt Management Office (DMO) show that N800 billion was offered across three reopened instruments at the February 23, 2026 auction.

The bonds included the 17.95% FGN JUN 2032, 19.89% FGN MAY 2033, and 19.00% FGN FEB 2034.

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What the bond auction result document shows

At the February auction, the 7-year 17.95% FGN JUN 2032 bond recorded subscriptions of N851.59 billion against N400 billion offered.

The 9-year 19.89% FGN MAY 2033 attracted N874.69 billion for N300 billion on offer, while the 10-year 19.00% FGN FEB 2034 received N972.93 billion in bids for N100 billion offered.
Combined, this brought total subscriptions to N2.70 trillion for N800 billion offered, translating to a bid-to-offer ratio of about 3.4 times.

In comparison, the January 26, 2026, auction recorded total subscriptions of N2.25 trillion against N900 billion offered. Month on month, this represents a N446 billion increase in demand, alongside an improvement in the bid-to-offer ratio from roughly 2.5 times in January to 3.4 times in February.

Despite stronger demand, the DMO allotted only N524.28 billion in February, comprising N188.14 billion for the 2032 bond, N208.63 billion for the 2033 bond and N127.51 billion for the 2034 bond.

In January, competitive allotments totalled N1.54 trillion, with an additional N130.72 billion issued through non-competitive allotments.

This indicates a month-on-month drop of about 66% in competitive allotments, suggesting that the Federal Government deliberately moderated domestic borrowing volumes in February despite ample liquidity in the market.

Marginal rates decline by up to 202 basis points

Pricing conditions improved significantly in February. The marginal rates settled at 15.74% for both the 7-year and 9-year bonds, and 15.50% for the 10-year bond.

In January, marginal rates were notably higher at 17.62% for the 7-year bond, 17.50% for the FEB 2034 bond and 17.52% for the JAN 2035 bond.
On a month-on-month basis, the 7-year stop rate declined by 188 basis points, the FEB 2034 bond fell by 176 basis points, while comparison with the JAN 2035 10-year bond shows a decline of 202 basis points.
Bid ranges also reflected reduced yield pressure. In February, bids on the 7-year bond ranged between 14.90% and 20.00%.

In January, the upper end of the range on the 2035 bond reached 25.90%, highlighting the higher yield volatility seen in the previous month.

In both auctions, the DMO maintained the original coupon rates on the instruments, meaning the stop rate reflects the clearing yield for successful bids rather than a change in coupon structure.

Overall, February’s auction signals improving funding conditions for the Federal Government.

Investor demand strengthened, yields moderated sharply, and the DMO exercised restraint by issuing significantly less than in January.

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