FG allots N748.64bn in Sept bond auction as demand drops 13.5% and yields ease
The Debt Management Office allotted N748.64 billion to investors in its September 2026 bond auction, drawing N1.49 trillion in subscriptions—down 13.5% from August’s N1.73 trillion and lowering the market allotment from N805.16 billion to N748.64 billion, a 7% drop. The auction offered a new 10‑year FGN September 2036 bond (16.79% coupon) and reopened the 15.45% FGN June 2038 bond. Investors bid N546.90 billion for the new issue against a N400 billion offer, securing N288.63 billion at the 16.79% marginal rate, while the reopened bond attracted N947.83 billion in bids versus N600 billion offered, earning N460.01 billion at a 16.85% marginal rate.
Why it matters: The decline in marginal yields—especially the 94-basis-point drop on the June 2038 bond to 16.85%—signals that borrowing costs on longer‑dated government debt have eased, even as overall demand moderated. With a minimum entry of N50.001 million, participation remains limited to institutional and high‑net‑worth investors. These securities continue to serve as Nigeria’s fixed‑income benchmark, qualify as trustee investments under the Trustee Investment Act, and are tax‑exempt under the Companies Income Tax Act and Personal Income Tax Act.
What you should know: If you meet the N50 million threshold, you can take part in future DMO auctions through competitive bidding or purchase via primary dealers; otherwise consider the FGN Savings Bond, which currently offers up to 15.12% annual interest. Monitoring marginal rate trends helps gauge market sentiment and inflation expectations. Auction details, including dates and minimum bids, are published on the DMO website typically two weeks before each offering.