DMO raises bond yields amid inflation concerns and investor caution

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By Boluwatife Oshadiya, 28th april 2026

Key Points

• DMO offers ₦700bn across 5-, 7-, and 10-year bonds
• Total subscriptions reach ₦948bn
• Stop rates increase on shorter tenors
• Secondary market turns bearish

Main Story

The Debt Management Office Nigeria (DMO) increased stop rates on Nigerian government bonds at its April auction, reflecting investor demand for higher yields amid rising inflationary pressures.

The DMO offered ₦700 billion across reopened bonds maturing in 2030, 2032, and 2035. Total subscriptions reached ₦948 billion, indicating sustained investor interest in fixed-income securities despite tightening financial conditions.

However, the agency ultimately raised ₦276.8 billion, with stop rates set at 16.30% for the 5-year bond, 16.50% for the 7-year bond, and 16.59% for the 10-year bond.

The 5-year bond saw subscriptions of ₦181.95 billion against a ₦300 billion offer, with allotments of ₦46.84 billion at a higher rate compared to 16% recorded in March.

Similarly, the 7-year bond attracted ₦167.04 billion in subscriptions, exceeding the ₦100 billion offer, with ₦18.72 billion allotted at 16.50%, up from 16.15% previously.

The 10-year bond recorded the strongest demand, with ₦599.02 billion in subscriptions. Despite this, the DMO allotted ₦211.24 billion at a slightly lower rate of 16.59%, compared to 17.52% at the January auction.

In the secondary market, bond trading sentiment weakened, particularly in the mid-tenor segment. Investors offloaded key instruments including JAN-2035 and FEB-2034 bonds, pushing average yields up by 3 basis points to 16.07%.

What’s Being Said

Fixed-income analysts point to inflationary pressures and monetary tightening expectations as key drivers of rising yields.

“Investors are demanding higher compensation for risk, especially in an environment of elevated inflation and currency volatility,” analysts said.

What’s Next

Bond market performance will likely be influenced by inflation trends, liquidity conditions, and monetary policy decisions by the Central Bank of Nigeria, with yields expected to remain elevated in the near term.