By Tony Obiechina Abuja
The Federal Government, through the Debt Management Office (DMO), has announced plans to raise N350bn via a bond auction, reinforcing its commitment to securing long-term funding for national development.
According to the DMO’s, notice, the auction, scheduled for Monday, February 24, 2025, will see the reopening of two previously issued Federal Government Bonds: the 19.30 per cent FGN April 2029 bond with an offer size of N200bn and the 18.50 per cent FGN February 2031 bond, offering N150bn.
The settlement date for successful bidders is set for February 26, 2025.
This issuance aligns with the government’s broader strategy of raising capital to finance national projects while providing investors with a stable and secure investment opportunity. By reopening these bonds, the government aims to enhance liquidity in the bond market and efficiently manage its debt obligations.
The bonds are offered in units of N1,000, with a minimum subscription of N50,001,000. Subsequent investments must be in multiples of N1,000. While the coupon rates remain fixed at 19.30 per cent and 18.50 per cent for the 2029 and 2031 bonds, respectively. The final price paid by investors will depend on the yield-to-maturity bid clearing the auction volume.
Investors will also be required to cover any accrued interest from the last coupon payment date to the settlement date.
Bond interest payments will be made semi-annually, ensuring steady returns for investors. Upon maturity, the principal will be repaid in full via bullet repayment, meaning the entire face value is disbursed at once.
These bonds qualify as government securities under Nigerian tax laws, making them highly attractive to institutional investors such as pension funds and insurance companies. Under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), pension funds and other qualified institutional investors are eligible for tax exemptions.
Additionally, the bonds meet the requirements of the Trustee Investment Act, allowing trustees to allocate funds confidently. Listed on both the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange, the bonds offer investors the flexibility to trade them in the secondary market.
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Investors interested in participating in the bond auction can do so through Primary Dealer Market Makers (PDMMs) authorised by the DMO. These financial institutions include major banks such as Access Bank, First Bank of Nigeria, Stanbic IBTC Bank, Citibank Nigeria, Guaranty Trust Bank, and Zenith Bank, among others.
With this latest bond issuance, the federal government continues to reinforce its fiscal management strategy, offering a secure and structured investment opportunity while addressing national funding needs.
