DMO Raises FGN Bond Costs, Cuts Allotment to N485.50B

On March 30, the Debt Management Office (DMO) conducted a Federal Government (FGN) bond auction where it raised borrowing costs significantly, leading to a reduced allotment of N485.50 billion. The auction results indicated a sharp rise in stop rates compared to previous auctions held in early February and mid-March 2026, despite strong investor interest.

The DMO opted for a conservative allotment approach, signaling a possible attempt to manage rising debt costs, as demand remained concentrated on longer tenor instruments. The increase in stop rates across mid to longer maturities marked a departure from the earlier easing trend observed in Nigeria's fixed income market.

The auction recorded strong investor interest, with total subscriptions exceeding the amount offered. However, the DMO's decision to limit allotment suggests a shift in borrowing dynamics and a rise in yield, reflecting changing investor risk expectations.