…As Stop Rates Rise By 50bps
Amid growing concerns of analysts and other experts on Nigeria’s borrowing trend, the Debt Management Office (DMO) on Monday allotted N1.22 trillion to the market at its October 19, 2026, Federal Government of Nigeria (FGN) bond auction, representing about 63.5% higher than the N748.64 billion it allotted in last month’s auction
Data from the Office on the results of the auction indicated that it also made N800 billion in non-competitive allotments, shared equally between the February 2034 and September 2036 bonds, bringing total allotments to N2.02 trillion.
While the auction results reflected that the DMO accepted higher yields on the 10-year and 15-year bonds to raise the amount, it also reopened three bonds and offered N1.75 trillion in total, while investors submitted bids worth the same amount.
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The N1.22 trillion market allotment resulted in a bid-to-cover ratio of 1.4x, with the Office rejecting about N523.58 billion, or roughly 30% of subscriptions.
According to the DMO’s data, the stop rates on the September 2036 and June 2038 bonds rose by 50 basis points (bps) and 34bps to 17.29% and 17.19%, respectively just as the February 2034 bond settled at 16.99%.
The results for the three reopened bonds showed different levels of investor demand and allotment.
For the 19.00% FGN February 2034, the bids reached N304.08 billion against an offer of N500 billion, representing a 0.61x bid-to-offer ratio. The DMO allotted N92.14 billion to the market, about 30% of bids, with bid rates ranging from 16.00% to 19.00%.
Also, for the 16.79% FGN September 2036 offer, investors submitted N925.35 billion in bids against N800 billion offered, representing a 1.16x ratio, but DMO allotted N781.31 billion, about 84% of bids, at a stop rate of 17.29%, up from 16.79% in September.
Similarly, for the 15.45% FGN June 2038 offer, bids totalled N518.32 billion against N450 billion offered, representing a 1.15x ratio. Again, as it was with the other offers, the DMO allotted N350.72 billion at 17.19%, compared with 16.85% in September.
A further analysis of the DMO’s data on the auctions showed that the October auction attracted 443 bids, of which 274 were successful, compared with 441 bids and 204 successful bids in September. The total subscriptions rose by about 17% from N1.49 trillion in September 2026 auction.
The June 2038 bond also recorded a reversal in its recent yield trajectory, clearing at 18.40% in July, 17.79 in August, and 16.85% in September.
The data indicated that the October stop rate of 17.19% represented a rebound, although it remains 60bps below the August level, the February 2034 bond was undersubscribed and the highest bids reached 19.00% for the February 2034 bond and 18.50% for the other two bonds, above their stop rates respectively.
