The Debt Management Office (DMO) offered ₦800 billion across three reopened instruments, 17.95% FGN JUN 2032, 19.89% FGN MAY 2033 and 19.00% FGN JAN 2034, ₦100 billion lower than the previous auction size.
Total subscription printed at ₦2.69 trillion, 19.56 percent higher than the prior auction, indicating sustained liquidity and aggressive institutional participation. The bid-to-offer ratio settled at 3.37x.
Despite the strong demand, the DMO allotted ₦524.27 billion, significantly below total bids received and lower than the ₦1.68 trillion allotted at the previous sale.
The selective allotment resulted in a final bid-to-cover ratio of 5.15x, reflecting disciplined issuance amid tightening yield conditions.
Demand concentrated at the medium end of the curve. The JUN 2032 and MAY 2033 papers attracted ₦851.59 billion and ₦874.69 billion respectively, while the JAN 2034 bond drew ₦972.93 billion in subscriptions.
Stop rates declined materially across all tenors. The JUN 2032 and MAY 2033 instruments cleared at 15.74 percent, down from 17.62 percent and 17.50 percent previously.
The JAN 2034 closed at 15.50 percent versus 17.52 percent at the prior auction.
The sharp compression in marginal rates reflects investor conviction that disinflation remains intact. Headline inflation printed at 15.10 percent in January 2026, strengthening expectations of potential monetary easing.
Secondary market performance reinforced the bullish tone. Average bond yields declined by 88 basis points to 16.02 percent as of February 20, 2026.
The mid-segment led the rally, shedding 99 basis points to 16.26 percent. Short-tenor yields fell 96 basis points to 16.24 percent, while long-dated yields moderated 46 basis points to 15.16 percent.
The auction outcome signals a clear duration strategy by institutional investors positioning ahead of the Monetary Policy Committee decision.
Market participants appear to be locking in yields in anticipation of a possible rate cut that could extend price gains across fixed income assets.
External buffers remain stable. Gross official reserves stood at $48.76 billion as of February 19, 2026. Brent crude traded at $71.11 per barrel, while Bonny Light closed at $74.38 per barrel, supporting macro stability.
Attention now shifts to the MPC outcome. A policy easing would likely sustain yield moderation and support further capital appreciation in sovereign bonds. A hold decision may slow the pace of compression but is unlikely to reverse the prevailing demand dynamics.
