The Federal Government of Nigeria (FGN) has announced that three bonds totaling N450 billion will be available for subscription.
This was revealed in yesterday’s DMO-issued January 2025 FGN Bond Auction Results.
With a five-year reopening and an annual interest rate of 19.30 percent, the first bond available is a N100 billion April 2029 FGN bond. A February 2031 FGN bond worth N150 billion with an annual interest rate of 18.50 percent is being reopened for seven years as the second offer.
The third offer consists of a ten-year reopening of a N200 billion FGN bond issued in January 2035. On January 27, these bonds will go up for auction, and on January 29, they will be settled.
The bonds have a minimum subscription of N50 million and are offered at a price of N1,000 per unit, with subsequent multiples of N1,000.
The DMO explained that winning bidders will pay a price equal to the yield-to-maturity offer that clears the auction volume if previously issued bonds are reopened, in addition to any interest that has accumulated.
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The bonds have a bullet repayment schedule for the principal amount at maturity, and interest is paid semi-annually. These bonds are issued using Nigeria’s general assets and are fully backed by the Federal Government.
According to the Trustee Investment Act, they are securities that trustees may invest in. Additionally, they are government securities under the Company Income Tax Act and the Personal Income Tax Act, which exempts pension funds and other connected institutions from paying taxes.
Bonds are also listed on the Nigeria Exchange Limited and are considered liquid assets for banks’ liquidity ratio calculations.
In addition to offering both domestic and foreign investors appealing investment options, the DMO’s offering demonstrates the government’s commitment to mobilising capital for important national projects and the N13 trillion 2025 budget deficit finance.
