Nigeria’s Debt Management Office (DMO) has raised ₦524.28 billion at its February 2026 Federal Government bond auction, falling short of its ₦800 billion offer despite overwhelming investor demand.
DMO revealed this in its report on the summary of FBN bond auction results for February 2026, released on Tuesday, February 24.
A review of the results show that total subscriptions reached nearly ₦2.7 trillion, more than three times the amount offered, underscoring a strong appetite for government securities.
But the debt office only allotted ₦524.28 billion, indicating that the shortfall was not driven by weak demand but by a deliberate effort to manage borrowing costs.
The DMO significantly reduced allocations on the two shorter tenors even though they were heavily oversubscribed.
The seven-year June 2032 bond had an initial offer of ₦400 billion, but the debt office allotted only ₦188.14 billion.
Similarly, the nine-year May 2033 bond was offered at ₦300 billion, with ₦208.63 billion eventually allotted.
Both instruments attracted subscriptions of over ₦850 billion each, reflecting strong market participation.
The 10-year February 2034 bond was the only tenor where DMO’s allotment exceeded the initial offer.
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Although ₦100 billion was put on offer, the DMO allotted ₦127.51 billion after receiving subscriptions of ₦972.93 billion for the 10-year tenor.
It recorded the lowest marginal rate of the auction at 15.50 per cent, suggesting that the DMO was more comfortable extending borrowing at comparatively cheaper long-term rates.
Overall, the auction indicates that pricing, rather than funding volume, guided the DMO’s strategy.
The debt office capped the marginal rates on the seven-year and nine-year bonds at 15.74 per cent.
Instead of accepting higher-yield bids to meet the ₦800 billion target, it limited successful bids and maintained tighter control over rates.
Analysts say the outcome reinforces two signals to the market.
First, investor demand for FGN bonds remains strong and second, the DMO appears determined to resist upward pressure on yields, even if it means borrowing less than initially planned.
Pinnacle Daily earlier reported that the DMO opened ₦800 billion in FGN bonds at ₦1,000 per unit, which marked one of the highest-yielding bond sales in recent years.
It stated that the interest is “payable semi-annually”, while redemption will be through “bullet repayment on the maturity date”.
It also said the bonds “qualify as securities in which trustees can invest under the Trustee Investment Act.”
The DMO, however, added that it “reserves the right to allot the bonds at its discretion.”
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
