FG targets N800bn in February bond sale

The Debt Management Office has announced plans to raise N800bn through its February 2026 bond auction, more than double the amount offered in the same period last year, though slightly below January’s record issuance.

Details contained in the agency’s offer circular show the Federal Government will issue N400bn of the 17.95 per cent FGN JUN 2032 bond, N300bn of the 19.89 per cent FGN MAY 2033 bond, and N100bn of the 19.00 per cent FGN FEB 2034 bond, bringing the total to N800bn.

The auction is scheduled for February 23, with settlement two days later.

Compared with February 2025, when the DMO offered N350bn, the new issuance represents a N450bn increase, or about 128.6 per cent year-on-year, signalling a significant expansion in domestic borrowing.

The structure of the offer also indicates a shift in strategy. Unlike last year’s mix that included a five-year instrument, this year’s bonds are concentrated on seven- and 10-year tenors, suggesting efforts to extend the maturity profile of government debt and ease short-term refinancing risks.

Interest rates, however, remain high. The seven-year bond carries a 17.95 per cent coupon, slightly lower than the comparable rate last year. The 10-year papers are priced at 19.00 per cent and 19.89 per cent, reflecting tight financial conditions and elevated borrowing costs.

Although the February offer is N100bn lower than January’s N900bn sale, it remains substantially higher than last year’s level, underscoring the government’s increasing reliance on the domestic bond market to finance its obligations.