After Spot Rates Hike, DMO Reopens 7, 10-Year Bonds for Sale
After the spot rates hike in December, the Debt Management Office (DMO) is scheduled to conduct its monthly Federal Government Bond auction on Monday, with three reopening instruments.
The three local bonds offer amounting to N900 billion will be opened for investor subscriptions with mixed expectations following disinflation reversal.
The Central Bank of Nigeria (CBN) discount rates decision at the midweek Treasury bills auction last week signals possible continuation of the repricing that started in the fourth quarter of 2025.
At the first bonds auction in 2026, the market expects 18.50% FGN FEB 2031 worth N300 billion to be floated for subscription. Also, 9.00% FGN FEB 2034 local bonds totalling N400 billion will be among the offers to be made available at the auction.
The DMO also planned to raise N200 billion from 22.60% FGN JAN 2035 bonds on Monday as efforts to bridge 2026 budget deficit gap begin.
At the last auction in 2025, the DMO increased the spot rate on 17.945% FGN AUG 2030 bonds to 17.20%, from 15.9%, matching the energy with the CBN offer on Treasury bills.
The spot rate on 17.95% FGN JUN 2032 bonds was hiked to 17.3% from 16% despite higher subscription on the 7-year reopened bonds versus the offer for subscription.
“Litmus test for the DMO on Monday at its first bond outing for 2026 in the trillion-auction series, we are reminded of duration-play in relation to the offer amount, especially at a time where it plans to offer on the trillion-mark monthly through Q1-2026.
“This auction promises to be an interesting one for the market as we remain focused on the funding need and preferred maturity-profile of the issuer despite the recent renewed interest for bonds”, AAG Capital Limited said in a commentary note. First HoldCo Names New Boards in Non-Banking Subsidiaries
