The Federal Government of Nigeria (FGN) allotted a total of N1.54 trillion at its January 2026 bond auction, significantly exceeding the N900 billion originally offered, as strong investor demand underscored sustained confidence in government securities despite elevated interest rates.
The figures were released by the Debt Management Office (DMO) following the auction held on January 26, 2026. The exercise involved the re-opening of three existing FGN bond instruments, all of which recorded heavy oversubscription, prompting the government to raise its allotment size well above the initial offer.
Settlement for all successful bids is scheduled for January 28, 2026.
Strong demand across maturities
Investor appetite was robust across all tenors on offer, with longer-dated bonds attracting particularly strong interest, even amid wide bid ranges and lingering macroeconomic uncertainty.
The 18.50% FGN February 2031 bond had an offer size of N300 billion but attracted total bids of N514.45 billion from 124 submissions. Of this amount, N398.19 billion was allotted, including N17.50 billion issued through non-competitive allotments.
The 19.00% FGN February 2034 bond recorded the strongest demand, with subscriptions reaching approximately N1.01 trillion against an offer of N400 billion. Total allotment on the instrument stood at N576.33 billion, including N113.22 billion allotted on a non-competitive basis.
The 22.60% FGN January 2035 bond also saw heavy interest, attracting bids of N731.40 billion for an offer size of N200 billion. The DMO allotted N570.16 billion on the bond from 176 successful bids.
In total, the three instruments accounted for the N1.54 trillion allotted, far exceeding the original N900 billion on offer.
Marginal rates clear below coupons
Despite aggressive bidding, marginal rates across the three bonds cleared well below their respective coupon rates, reflecting investors’ willingness to lock in long-term yields.
The February 2031 bond, with a remaining tenor of about five years, cleared at a marginal rate of 17.62%, with bids ranging between 15.85% and 18.50%.
The February 2034 bond, with roughly eight years to maturity, cleared at a marginal rate of 17.50%, within a bid range of 16.00% to 19.40%.
The January 2035 bond, which has close to nine years remaining, cleared at a marginal rate of 17.52%, despite bids extending as high as 25.90%.
The DMO clarified that while allotments were made at the marginal rates, the original coupon rates of 18.50%, 19.00%, and 22.60% will be paid over the life of the respective bonds.
What this signals
The auction results point to strong demand along the yield curve, suggesting that investors remain comfortable locking in long-term FGN securities despite inflation concerns, tight monetary conditions, and fiscal pressures.
Clearing marginal rates below coupon levels also indicates intense competition among bidders and confidence in the government’s ability to meet its debt obligations.
Flashback and context
The strong January outcome follows earlier signals of sustained demand for FGN bonds. In December 2025, the Federal Government raised N596.47 billion at its bond auction, exceeding the N460 billion initially offered through the re-opening of the FGN August 2030 and FGN June 2032 bonds.
Between January and December 2025, total FGN bond allotments amounted to approximately N5.12 trillion, according to DMO data. In January 2025 alone, the government raised N669.94 billion against an offer size of N450 billion.
What you should know
FGN bond auctions remain a central pillar of Nigeria’s domestic borrowing strategy and serve as key benchmarks for pricing other fixed-income instruments in the market.
The strong oversubscription recorded in January 2026 reinforces the role of government securities as a preferred investment destination for institutional investors seeking attractive yields and relative safety in a volatile economic environment.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
