By Onu Okorie

Debt Management Office DMO conducted its July 2026 Federal Government of Nigeria FGN bond auction on July 20, offering a total of N1.2 trillion. The bond did not make much difference from the June auction, through the re-opening of three instruments: the 22.60% FGN JAN 2035, the 16.2499% FGN APR 2037, and the newly introduced 15.45% FGN JUN 2038.

Investor demand strengthened considerably, with total subscriptions rising to N1.74 trillion from N1.41 trillion in June, lifting the bid-to-offer ratio to 1.45x from 1.18x.

Despite this stronger appetite, the DMO allotted only N979.32 billion, including N50 billion in non-competitive allotments, indicating that the debt office chose to ration volume rather than pay up for the additional demand. The bid-to-cover ratio climbed to 1.78x from 1.16x.

Stop rates on the two reopened instruments were held flat at 18.34 percent and 18.35 percent, while the newly reopened 15-year JUN 2038 cleared at 18.40 percent.

Domestic institutional investors, particularly Pension Fund Administrators, continued to dominate participation.

The 10-year JAN 2035 bond drew subscriptions of N555.47 billion, pushing its bid-to-offer ratio to 1.39x from 1.18x in June, while the 20-year APR 2037 bond recorded an even stronger ratio of 1.66x on subscriptions of N665.19 billion.

The newly reopened 15-year JUN 2038 attracted N518 billion, a 1.30x bid-to-offer ratio.

In the secondary market, trading remained subdued amid persistent bearish sentiment across the curve. Average benchmark yields rose by 55 basis points to 17.62 percent as of July 20.

The short end of the curve (0–5 years) saw yields climb 53 basis points to 17.92 percent, the mid-segment (6–12 years) witnessed strong selloffs, and the long end (above 12 years) posted a 71-basis-point rise to 18.20 percent, alongside a separate 23-basis-point move to 15.50 percent.