The Federal Government has announced an offer for subscription by auction of two re-opened Federal Government of Nigeria (FGN) bonds totalling ₦300 billion.

In a statement, the Debt Management Office (DMO) said the bonds are part of the government’s domestic borrowing strategy, aimed at financing budget deficits and supporting infrastructure development.

The DMO is offering two bonds for subscription:

1. N200,000,000,000.00 – 19.30% FGN APR 2029 (5-Year Re-opening)
2. N100,000,000,000.00 – 19.89% FGN MAY 2033 (9-Year Re-opening

The auction is scheduled for March 24, 2025, with a settlement date of March 26, 2025.

Both bonds are re-openings of previously issued bonds, meaning the coupon rates have already been set. Investors will pay a price corresponding to the yield-to-maturity bid that clears the auction volume, plus any accrued interest on the instrument.

Key Features of the bonds include:

1. Units of Sale: The bonds are sold at N1,000 per unit, with a minimum subscription of N50,001,000 and multiples of N1,000 thereafter.
2. Interest Payment: Interest is payable semi-annually, providing a steady income stream for investors.
3. Redemption: The bonds will be repaid in full (bullet repayment) on their respective maturity dates.
4. Status: The bonds qualify as securities in which trustees can invest under the Trustee Investment Act. They also qualify as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA), making them tax-exempt for pension funds and other investors. Additionally, the bonds are listed on the Nigerian Exchange Limited (NGX) and FMDQ OTC Securities Exchange, ensuring liquidity and transparency.

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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 are exempt from taxes, making them particularly attractive to pension funds and other institutional investors seeking tax-efficient investment options.

As listed securities, the bonds can be easily traded on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, providing investors with liquidity and flexibility.

Backed by the full faith and credit of the Federal Government of Nigeria, the bonds are considered low-risk investments. They are also charged upon the general assets of Nigeria, further enhancing their security.

The auction will be conducted on March 24, 2025, with successful bidders required to settle their purchases by March 26, 2025.