The Debt Management Office (DMO) yesterday auctioned N600 billion worth of reopened Federal Government of Nigeria bonds at yields as high as 22.6 per cent.

This comes as the Federal Government sustained its reliance on existing bond lines to deepen the domestic debt market and raise funds amid a high-interest-rate environment.

The auction featured two previously issued instruments with coupon rates of 22.6 per cent and 16.25 per cent, with settlement scheduled for May 20, 2026.

The offer was split into N300 billion of the 22.6 per cent FGN Bond due January 2035, a 10-year re-opening, and N300 billion of the 16.25 per cent FGN Bond due April 2037, a 20-year re-opening.

The bonds, priced at N1,000 per unit, carry semi-annual interest payments, while the principal will be repaid in full at maturity.

According to details of the auction, the exercise was facilitated by a consortium of primary dealer market makers (PDMMs), including Access Bank, Zenith Bank and Guaranty Trust Bank, among others.

The DMO stated that the minimum subscription for the bonds was N50.001 million and noted that the instruments are backed by the full faith and credit of the FGN.

It explained that because the instruments are re-openings, the coupon rates have already been fixed, meaning successful bidders would pay a price corresponding to the yield-to-maturity that clears the auction volume, in addition to accrued interest on the bonds.

The agency said the structure allows it to consolidate liquidity in existing bond lines instead of introducing entirely new instruments into the market.

Market analysts noted that the wide gap between the two instruments reflects the inverted yield trend that has characterised Nigeria’s fixed income market in recent months, with shorter-dated instruments attracting higher yields due to tight monetary policy conditions.

The DMO also highlighted several features aimed at boosting investor appetite for the bonds.

According to the agency, the instruments qualify as trustee investment securities under the Trustee Investment Act and are recognised as government securities under the Companies Income Tax Act (CITA) and Personal Income Tax Act (PITA), making them tax-exempt for pension funds and other qualified investors.

It added that the bonds are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, providing secondary market liquidity and price transparency.

Yesterday’s sale marked the latest in a series of bond re-openings conducted by the DMO since December 2025, highlighting the Federal Government’s continued dependence on domestic borrowing through established bond lines.

In January 2026, total allotments at a similar auction rose to N1.54 trillion, surpassing the N900 billion offered, driven by strong investor demand across three reopened bonds, including the same 22.60 per cent FGN January 2035 instrument featured in yesterday’s sale.

By February 2026, the DMO auctioned N800 billion through three re-openings at yields below 20 per cent, signalling a moderation in borrowing costs compared with the peak rates recorded in January.

The agency also reopened the 22.6 per cent FGN January 2035 bond in its N700 billion April 2026 auction alongside shorter-dated instruments, maintaining its strategy of tapping existing lines while yields remained elevated.

With yesterday’s offering representing the fifth re-opening cycle since December 2025, the 22.6 per cent January 2035 bond has continued to emerge as the DMO’s benchmark long-dated instrument in the current high-rate borrowing environment.