Nigeria FGN bond yields fall as investors bid N1.49tn

The Nigerian Debt Management Office (DMO) reported strong investor demand during its September bond auction, with total bids reaching N1.49 trillion against an offered N1 trillion. The auction featured two instruments: a new 10-year FGN September 2036 bond and a reopened 15-year FGN June 2038 bond.

For the 2036 bond, investors submitted N546.90 billion in bids for the N400 billion offered, resulting in a marginal rate of 16.79 percent. The DMO allotted N288.63 billion to the market. For the reopened 2038 bond, bids totaled N947.83 billion against a N600 billion offer, with a marginal rate of 16.85 percent. This rate represents a significant decline of 94 basis points from the 17.79 percent recorded in the August auction.

While total subscriptions exceeded the offer by approximately 49.5 percent, the DMO allotted a total of N748.64 billion to the market, leaving roughly N746.59 billion in bids unaccepted. The decline in yields suggests a moderation in required returns for longer-dated government securities and an improved appetite for domestic debt despite elevated borrowing costs.