DMO Opens January 2026 Bond Auction to Raise ₦900 Billion
FGN bonds offer several statutory advantages that enhance their appeal to the investing public
The Debt Management Office (DMO) has announced plans to raise ₦900 billion through the reopening of three Federal Government of Nigeria (FGN) bonds in its January 2026 auction. According to a circular issued by the agency on Monday, 20 January 2026, the auction is scheduled for 26 January 2026, with a settlement date of 28 January 2026. This move aligns with the Federal Government's domestic borrowing strategy to finance the national budget and manage existing debt obligations.
Auction Details and Bond Structures
The January offering comprises three distinct instruments with varying maturities, aimed at attracting a broad spectrum of institutional and individual investors. The DMO is targeting a total subscription of ₦900 billion, distributed as follows:
₦300 billion for the 18.50 per cent FGN February 2031 bond (7-year reopening);
₦400 billion for the 19.00 per cent FGN February 2034 bond (10-year reopening);
₦200 billion for the 22.60 per cent FGN January 2035 bond (11-year reopening).
Each bond is priced at ₦1,000 per unit, requiring a minimum subscription of ₦50,001,000, with subsequent increments in multiples of ₦1,000. Interest on these instruments will be paid semi-annually, with a bullet repayment of the principal amount upon maturity.
Market Context and 2025 Performance
The DMO’s decision to reopen existing bonds rather than issue new ones is a tactical approach to deepen market liquidity and maintain a stable benchmark yield curve. In 2025, total bond allotments reached approximately ₦5.12 trillion, reflecting sustained investor confidence and robust demand for sovereign debt securities despite broader macroeconomic pressures. By tapping into existing instruments, the government ensures cost-efficiency in debt servicing while providing predictable returns for long-term investors such as pension fund administrators (PFAs) and insurance firms.
Investor Incentives and Regulatory Compliance
FGN bonds offer several statutory advantages that enhance their appeal to the investing public. These securities qualify as liquid assets for commercial banks in the calculation of liquidity ratios and are recognized under the Trustee Investment Act. Furthermore, income derived from these bonds is exempt from taxes under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA).
The bonds will be listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange to facilitate secondary market trading. Prospective investors are required to submit their applications through authorised Primary Dealer Market Makers (PDMMs).
The ₦900 billion January auction represents a significant start to the Federal Government's 2026 domestic funding programme. By offering a mix of medium- and long-term maturities with competitive fixed coupon rates, the DMO aims to balance the government's financing needs with the market’s appetite for low-risk, tax-efficient assets. The outcome of this auction will serve as a critical indicator of domestic liquidity and interest rate expectations for the first quarter of the year.
