The Federal Government of Nigeria (FGN) has announced a public offer for the subscription of two re-opened Federal Government of Nigeria (FGN) bonds, totaling ₦300 billion. The auction, managed by the Debt Management Office (DMO), is part of the government’s domestic borrowing strategy aimed at financing budget deficits and supporting infrastructure development.
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According to a statement from the DMO, the offer comprises:
• ₦200 billion – 19.30% FGN APR 2029 (5-Year Re-opening)
• ₦100 billion – 19.89% FGN MAY 2033 (9-Year Re-opening)
Both bonds are scheduled for auction on March 24, 2025, with a settlement date set for March 26, 2025. As re-openings of previously issued bonds, they maintain their existing coupon rates. Investors will purchase the bonds at prices corresponding to their yield-to-maturity bids, plus any accrued interest.
Key Features of the Bonds
1. Units of Sale – The bonds are issued at ₦1,000 per unit, with a minimum subscription of ₦50,001,000 and in multiples of ₦1,000 thereafter.
2. Interest Payment – Interest is paid semi-annually, offering a regular income stream for investors.
3. Redemption – The bonds will be repaid in full at maturity (bullet repayment).
4. Investment Status –
• Recognized as trustee-investable securities under the Trustee Investment Act.
• Classified as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA).
• Exempt from taxes for pension funds and other eligible investors.
• Listed on Nigerian Exchange Limited (NGX) and FMDQ OTC Securities Exchange, ensuring liquidity and transparency.
Investment Benefits
With interest rates of 19.30% for the 5-year bond and 19.89% for the 9-year bond, these securities offer competitive returns compared to other fixed-income instruments in the market.
The bonds’ tax-exempt status makes them attractive to pension funds and institutional investors seeking efficient investment options. As listed securities, they are tradable on NGX and FMDQ OTC Securities Exchange, providing investors with liquidity and flexibility.
Furthermore, the bonds are backed by the full faith and credit of the Federal Government of Nigeria, making them low-risk investments. Their charge upon Nigeria’s general assets further enhances their security.
Auction and Settlement
The auction for these bonds will take place on March 24, 2025, with successful bidders required to complete their purchases by March 26, 2025.
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