The Debt Management Office (DMO) has unveiled plans to raise N800 billion through its February 2026 Federal Government bond auction, representing a sharp increase compared to the same period last year but a reduction from January’s record-sized offer.
This was according to the bond offer circular published on the DMO’s website on Monday.
The size and structure of the offer reflect a continued reliance on the domestic debt market, even as borrowing costs remain elevated.
What the data shows
According to the offer circular, the DMO is offering N400 billion of 17.95% FGN JUN 2032 (7-year re-opening), N300 billion of 19.89% FGN MAY 2033 (10-year re-opening), and N100 billion of 19.00% FGN FEB 2034 (10-year re-opening), bringing the total to N800 billion.
The auction is scheduled for February 23, 2026, with settlement on February 25, 2026.
In February 2025, the DMO offered N350 billion, comprising N200 billion of 19.30% FGN APR 2029 (5-year re-opening) and N150 billion of 18.50% FGN FEB 2031 (7-year re-opening).
Against that backdrop, February 2026’s N800 billion represents a year-on-year increase of N450 billion, or 128.6%. The government is therefore seeking more than twice the amount it offered in the corresponding month of 2025.
Beyond size, the maturity structure has shifted. While the February 2025 issuance included a 5-year instrument, the February 2026 programme is concentrated entirely on 7-year and 10-year tenors.
This suggests a deliberate move to extend the average maturity of domestic debt and reduce near-term refinancing pressure.
On rates, the picture is mixed but remains elevated. The 7-year bond in February 2026 carries a coupon of 17.95%, slightly lower than the 18.50% on the 7-year offered in February 2025.
However, the 10-year instruments now carry coupons of 19.00% and 19.89%, broadly in line with the high interest rate environment.
Overall, borrowing costs remain close to 19% for long-dated paper, reflecting tight liquidity and sustained monetary policy restraint.
February offer dips 11% from January’s N900 billion
A month-on-month comparison shows that the February offer is lower than the January 2026 offer.
In January 2026, the DMO offered a total of N900 billion, comprising N300 billion of 18.50% FGN FEB 2031 (7-year re-opening), N400 billion of 19.00% FGN FEB 2034 (10-year re-opening), and N200 billion of 22.60% FGN JAN 2035 (10-year re-opening).
- Compared with January’s N900 billion, the February 2026 offer of N800 billion reflects a reduction of N100 billion, or 11.1% month-on-month.
- On pricing, February shows some moderation at the margin. The 7-year rate declined from 18.50% in January to 17.95% in February.
- More notably, the 10-year FGN JAN 2035 bond offered in January carried a coupon of 22.60%, significantly higher than the 19.89% and 19.00% attached to February’s 10-year papers.
- This suggests some easing at the long end of the curve compared to January’s level, even though rates remain high by historical standards.
- Taken together, February 2026 reflects a recalibration rather than a retreat.
While the DMO has trimmed the offer size from January’s N900 billion, it is still borrowing at more than double last year’s February level and at interest rates hovering around 18 to 20%, showing the elevated cost of domestic debt financing.
