DMO offered N1.75tn of bonds on 19 October and sold N2.02tn; N800bn went through a non-competitive window its offer circular does not mention

The Debt Management Office put N1.75 trillion of Federal Government bonds up for sale on Monday, 19 October 2026, and sold N2.02 trillion. Its offer circular for the auction names three bonds and three amounts: N500 billion of the 19.00% FGN FEB 2034, N800 billion of the 16.79% FGN SEP 2036 and N450 billion of the 15.45% FGN JUN 2038. The result sheet the DMO published after the auction shows N1,224.17 billion allotted to bidders in the auction and a further N800.00 billion on a line headed "Non-Competitive Allotment". That second line is 39.5 per cent of the N2,024.17 billion sold. The circular does not use the word non-competitive, and neither do the DMO's circulars for the August and September auctions.

The offered amounts match the DMO's provisional bond issuance calendar for the fourth quarter of 2026, which lists N1,750.00 billion for 19 October and N2,000.00 billion each for 16 November and 14 December, N5,750.00 billion for the quarter. The calendar notes that it "is provisional and subject to change at short notice". The circular carries one qualification, in a footnote: "The DMO reserves the right to allot the FGN Bonds at its discretion." Neither document gives an amount, a ceiling or a rule for allotments made outside the auction.

Inside the auction, demand almost exactly matched the offer. Bidders asked for N1,747.75 billion across the three bonds (N304.08 billion, N925.35 billion and N518.32 billion), 99.9 per cent of the N1,750 billion on offer. The DMO allotted them N1,224.17 billion (N92.14 billion, N781.31 billion and N350.72 billion), 70.0 per cent of the offer, and turned down N523.58 billion of bids. On the competitive auction alone, the government raised N525.83 billion less than it advertised. The non-competitive line then added N800 billion, taking the total N274.17 billion above the offer.

The gap is widest on the shortest bond. For the 19.00% FGN FEB 2034, the DMO offered N500 billion and received 106 bids worth N304.08 billion. It accepted N92.14 billion of them, 30.3 per cent. The same sheet records N400.00 billion of non-competitive allotment on that bond, N95.92 billion more than all the competitive bids put together. Of the N492.14 billion of the bond sold on Monday, 81.3 per cent went outside the competitive auction. On the 16.79% FGN SEP 2036, a second N400.00 billion non-competitive allotment took sales to N1,181.31 billion against an offer of N800 billion. The 15.45% FGN JUN 2038 had no non-competitive line; the DMO sold N350.72 billion of the N450 billion offered.

October is the third auction in a row with this shape. In August the circular offered N1,100 billion; the result sheet shows N805.16 billion allotted to the market and N752.29 billion non-competitively, N742.29 billion of it on the JUN 2038 bond, for N1,557.45 billion in all. In September the circular offered N1,000 billion; the DMO allotted N748.64 billion to the market and N850.00 billion non-competitively (N600.00 billion on the new SEP 2036 bond and N250.00 billion on the JUN 2038), for N1,598.64 billion. In each of the three months the competitive allotment was below the amount offered and the total was above it.

Across the three auctions the DMO offered N3,850 billion, allotted N2,777.97 billion to competitive bidders and N2,402.29 billion non-competitively, N5,180.26 billion in total. Non-competitive allotments were 46.4 per cent of everything sold. Earlier in the year the lines were far smaller: the January sheet shows N130.72 billion under "Non-Competitive Allotment", and the May and July sheets show N280.00 billion and N50.00 billion under "Non-Competitive Bid"; the February, March, April and June sheets have no such line. All ten 2026 sheets together carry N2,863.01 billion on these lines, and 83.9 per cent of it falls in August, September and October.

The DMO's own revised calendar for the third quarter shows how far the totals moved from the plan. It gave an offer range of N650 billion to N750 billion for the JUN 2038 bond at the 17 August auction; N1,373.31 billion of that bond was sold. For 14 September it gave N500 billion to N700 billion for each of two bonds, at most N1,400 billion; N1,598.64 billion was sold.

The record supports the DMO on several points. Its circulars do reserve discretion over allotment, and its calendars warn that they may change. It publishes the non-competitive figures openly, bond by bond, on the same sheet as the auction result. Turning down part of the competitive bids may have helped hold down the cost of borrowing: the October sheet shows bids as high as 19.0000% on the FEB 2034 and 18.5000% on the other two bonds, against marginal rates of 16.9900%, 17.2900% and 17.1900%, and the coupons on all three bonds are kept. That reading is Vero Record's inference, not the DMO's stated reason. Nothing in these documents shows that any allotment broke a rule; the circulars set no rule on non-competitive allotments that Vero Record could find.

What the documents do not say is who received the N800 billion, at what price, or why the amount was not advertised in the circular. The result sheets do not name non-competitive bidders and do not say whether they were allotted at the marginal rate. They also do not show how much of the year's sales refinanced maturing debt, and Vero Record has not tested total 2026 bond sales against the borrowing approved in the 2026 Appropriation Act.

Press reports of the auction differ on the total. A Nairametrics headline on 20 October put the allotment at N2.2 trillion; its own article and the DMO sheet give N1,224.17 billion plus N800 billion, which is N2,024.17 billion.

Settlement for Monday's auction falls today, 21 October. The next date on the DMO's calendar is 16 November, for N2,000 billion across the same three bonds. Vero Record did not contact the DMO before publication. The open questions, who the non-competitive buyers were and on what terms, are for its Director-General, Patience Oniha.

What this rests on

DMO October 2026 FGN Bond Offer Circular, p.1: offered 500 + 800 + 450 = N1,750bn; footnote: 'The DMO reserves the right to allot the FGN Bonds at its discretion'; no mention of non-competitive bids (also absent from the August and September 2026 circulars). DMO Provisional FGN Bond Issuance Calendar Q4 2026: 19 Oct 1,750.00; 16 Nov 500 + 1,000 + 500 = 2,000.00; 14 Dec 2,000.00; total 1,750 + 2,000 + 2,000 = 5,750.00 (bond columns 1,500 + 2,800 + 1,450 = 5,750). DMO October 2026 FGN Bond Auction Result (19 Oct): subscription 304.08 + 925.35 + 518.32 = 1,747.75bn (99.9% of 1,750); allotted to market 92.14 + 781.31 + 350.72 = 1,224.17bn (69.95% of 1,750); rejected 1,747.75 - 1,224.17 = 523.58bn; shortfall to offer 1,750 - 1,224.17 = 525.83bn; non-competitive 400 + 400 = 800bn; total 1,224.17 + 800 = 2,024.17bn; over offer 2,024.17 - 1,750 = 274.17bn; non-competitive share 800 / 2,024.17 = 39.52%. FEB 2034: 92.14 / 304.08 = 30.3% of bids accepted; 400 - 304.08 = 95.92bn; 92.14 + 400 = 492.14bn; 400 / 492.14 = 81.28%. SEP 2036: 781.31 + 400 = 1,181.31bn vs 800 offered. August 2026 result: offered 250 + 100 + 750 = 1,100; market 64.13 + 110.01 + 631.02 = 805.16; non-competitive 10.00 + 742.29 = 752.29; total 1,557.45; JUN 2038 631.02 + 742.29 = 1,373.31. September 2026 result: offered 400 + 600 = 1,000; market 288.63 + 460.01 = 748.64; non-competitive 600 + 250 = 850; total 1,598.64. Three months: offered 1,100 + 1,000 + 1,750 = 3,850; market 805.16 + 748.64 + 1,224.17 = 2,777.97; non-competitive 752.29 + 850 + 800 = 2,402.29; total 5,180.26; 2,402.29 / 5,180.26 = 46.37%. All 2026 sheets, non-competitive lines: Jan 17.50 + 113.22 = 130.72; May 280.00; Jul 50.00; Aug 752.29; Sep 850.00; Oct 800.00; sum 2,863.01; 2,402.29 / 2,863.01 = 83.91%. Revised Q3 2026 calendar: 17 Aug JUN 2038 range 650-750 vs 1,373.31 sold; 14 Sep 500-700 + 500-700 = at most 1,400 vs 1,598.64 sold. Nairametrics headline N2.2tn vs 1,224.17 + 800 = 2,024.17.

What this does not establish

The documents do not identify the non-competitive bidders, the price or rate at which they were allotted, why the non-competitive amounts were not advertised in the offer circulars, or whether the January, May and July lines (headed 'Non-Competitive Allotment' or 'Non-Competitive Bid') are counted inside or beside the 'Amount Allotted' figures on those earlier sheets. They do not show how much of 2026 bond sales refinanced maturing debt, and total 2026 bond sales were not tested against the 2026 Appropriation Act or the borrowing plan. That rejecting high competitive bids lowered borrowing costs is an inference, not a stated DMO reason. Nothing in the documents indicates wrongdoing or a breach of any rule. The DMO was not contacted before publication.