FGN Bond Auction Sees 45% Decline in Subscriptions

Investor demand for Federal Government of Nigeria (FGN) bonds weakened sharply in May 2026, as total subscriptions fell by 45.6% month-on-month, despite higher yields at auction.

Data from the Debt Management Office (DMO) showed subscriptions dropped to ₦516.17bn in May from ₦947.99bn in April.

At the May 18 auction, the DMO offered ₦300bn each for the reopened 22.60% FGN January 2035 bond and the 16.2499% FGN April 2037 bond.

The 10-year paper attracted ₦262.23bn, while the 20-year bond recorded ₦253.94bn in bids — a steep decline compared to April, when investors submitted nearly ₦948bn across 5-, 7-, and 10-year instruments.

Despite weaker demand, yields rose. The 10-year bond cleared at 17.00%, up from 16.59% in April, while the 20-year paper cleared at 17.04%. April’s auction had cleared at 16.30% (5-year), 16.50% (7-year), and 16.59% (10-year).

Subscriptions for the 10-year bond fell by 56.2%, from ₦599bn in April to ₦262bn in May, underscoring reduced investor appetite.

However, total allotment more than doubled, rising to ₦614.51bn in May from ₦276.79bn in April, driven by a ₦280bn non-competitive bid on the 20-year bond. The DMO allotted ₦476.84bn on the 20-year instrument and ₦137.67bn on the 10-year paper.

The Federal Government continues to ramp up domestic borrowing to finance its widening fiscal deficit.

Following the National Assembly’s upward revision of the 2026 budget to ₦68.32tn, the deficit rose to ₦31.46tn, with borrowing projected at ₦29.20tn.