The Debt Management Office (DMO) has announced the public offering of N300 billion worth of Federal Government of Nigeria (FGN) bonds for subscription through auction, as part of the government’s strategy to raise funds for the 2025 fiscal year. The auction is scheduled for May 26, 2025, with settlement fixed for May 28, ensuring successful bidders begin earning interest immediately.
In its statement issued yesterday, the DMO said the offer consists of two reopened bonds aimed at appealing to both institutional and individual investors seeking stable fixed-income investment opportunities.
The first instrument is a five-year bond with a 19.30% coupon rate, initially issued in April 2029, through which the Federal Government seeks to raise N100 billion. The second is a nine-year bond, originally issued in May 2033, with a 19.89% coupon rate, targeting N200 billion in proceeds.
Both offerings are central to the government’s domestic borrowing plan, aimed at bridging the 2025 budget deficit of N13 trillion while continuing to fund key national infrastructure projects.
The bonds are issued in denominations of N1,000, with a minimum subscription of N50,001,000, after which investors may increase their holdings in multiples of N1,000. They offer semi-annual interest payments, providing investors with a predictable income stream, and will be redeemed in full upon maturity, ensuring lump-sum repayment of the principal.
To make the bonds more attractive, the DMO confirmed that tax exemptions under the Company Income Tax Act and Personal Income Tax Act apply to the instruments. This makes them particularly appealing to pension funds, insurance firms, and other institutional investors who benefit from such tax advantages.
Furthermore, the bonds are listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange, allowing for easy access and liquidity in the secondary market. Financial institutions may also count the bonds as liquid assets, which can be used to meet liquidity ratio requirements, a major advantage for banks and other regulated entities.
Backed by the full faith and credit of the Federal Government of Nigeria, the bonds offer an added layer of security and stability, a crucial factor in today’s uncertain economic climate. They also represent part of Nigeria’s broader strategy to rely more on domestic capital markets and reduce exposure to external debt and exchange rate risks.
To participate in the auction, investors are required to subscribe through authorised primary dealer market makers (PDMMs), which include major banks like Access Bank, Zenith Bank, Stanbic IBTC Bank, and United Bank for Africa (UBA).
The government’s borrowing from the domestic market has already hit N10.85 trillion in the first four months of 2025. The latest bond issuance is aimed at further tapping into local investor confidence while offering stable returns to the investing public.
As economic reforms continue and Nigeria grapples with both domestic and global fiscal pressures, the DMO’s auction is expected to attract strong interest from yield-hungry investors and institutions looking for safe-haven assets.
