DMO announces N600 billion FGN bond auction for May 2026

The Debt Management Office (DMO), on behalf of the Federal Government, has announced a fresh N600 billion Federal Government of Nigeria (FGN) bond auction for May 2026.

The bond offer forms part of the government’s broader strategy to finance fiscal obligations, deepen the domestic capital market, and attract institutional investors amid sustained demand for fixed-income securities.

According to the offer circular issued by the DMO on Tuesday, the auction will take place on May 18, 2026, while successful subscriptions will be settled on May 20, 2026.

What the DMO is saying

The DMO disclosed that the offer consists of two re-opened FGN bond instruments valued at N300 billion each.

• N300 billion 22.60% FGN January 2035 10-year re-opening bond
• N300 billion 16.2499% FGN April 2037 20-year re-opening bond
• Bond units are priced at N1,000 each
• Minimum subscription is N50,001,000
• Additional investments are allowed in multiples of N1,000

The DMO explained that because both instruments are re-openings of previously issued bonds, coupon rates have already been fixed.

• Interest payments will be made semi-annually
• Principal repayment will be through a bullet repayment structure at maturity
• Successful bidders will pay based on the yield-to-maturity that clears the auction, in addition to accrued interest

The agency also noted that the bonds are backed by the full faith and credit of the Federal Government of Nigeria.

More Insights

The latest bond issuance highlights the Federal Government’s continued reliance on the domestic debt market to fund budget deficits, refinance maturing obligations, and support infrastructure spending while reducing exposure to foreign currency borrowing risks.

A month-on-month comparison shows that the government reduced its bond offer size by N100 billion in May relative to April 2026.

In April, DMO offered N700 billion across three instruments:

• 10-year 2035 bond offered at N300 billion
• The 7-year 2032 bond offered at N100 billion
• The 5-year 2030 bond offered at N300 billion

The reduction to N600 billion in May reflects a more calibrated borrowing approach, likely influenced by a combination of improved liquidity conditions as oil prices surge and efforts to manage rising debt service costs.

What you should know

The bonds also come with several regulatory and tax incentives designed to support market participation.

• The instruments qualify as trustee investment securities under the Trustee Investment Act
• They qualify as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA)
• Pension funds and other eligible institutional investors may benefit from tax exemptions
• The bonds are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange for secondary market trading
• FGN bonds also qualify as liquid assets for banks in liquidity ratio calculations

The DMO directed interested investors to submit applications through approved Primary Dealer Market Makers (PDMMs), including major financial institutions such as Access Bank, First Bank, Stanbic IBTC, GTBank, UBA, Zenith Bank, Ecobank, and Standard Chartered Bank Nigeria.

DMO announces N600 billion FGN bond auction for May 2026 - Nairametrics