The Federal Government of Nigeria, through the Debt Management Office (DMO), announces plans to raise N120 billion through its upcoming bond auction. The auction is scheduled for December 16, 2024, with settlement slated for December 18, 2024.
This offering matches the November bond auction, one of the lowest amounts offered this year, as the government adopts a cautious approach to bond issuances.
The auction features two reopened bonds:
- 19.30% FGN April 2029 Bond (5-year reopening) valued at N60 billion.
- 18.50% FGN February 2031 Bond (7-year reopening) also valued at N60 billion.
Each unit is priced at N1,000, with a minimum subscription of N50,001,000. Additional units can be purchased in multiples of N1,000. The final price for successful bidders is determined by the yield-to-maturity bid that clears the auction volume, along with accrued interest.
Both bonds pay interest semi-annually and offer bullet repayment at maturity, ensuring investors receive their full principal amount.
The bonds are designed to appeal to a wide range of investors, offering:
- Tax exemptions: They qualify for exemptions under the Company Income Tax Act and the Personal Income Tax Act, making them particularly attractive to institutional investors such as pension funds.
- Tradability: Listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, these bonds are easy to trade in secondary markets.
- Liquidity: They qualify as liquid assets for bank liquidity ratio calculations, enhancing their value to financial institutions.
- Government guarantee: Backed by the full faith and credit of the Federal Government, the bonds provide a secure and stable investment option.
The DMO urges interested investors to approach any Primary Dealer Market Makers (PDMMs) authorized to facilitate the auction, including major financial institutions like Access Bank, Zenith Bank, Guaranty Trust Bank, and First Bank of Nigeria.
This bond issuance is part of the Federal Government’s broader strategy to mobilize domestic resources for infrastructure development and other critical projects while meeting budgetary obligations.
In November 2024, the Federal Government successfully raised over N346 billion through a bond auction, surpassing its target despite a reduction in the amount offered. Investor demand remained high, with bids reaching 208% of the offered amount, underscoring strong confidence in government securities.
The Federal Government continues to leverage the bond market to meet financial needs while offering investors attractive, secure returns.
, announces plans to raise N120 billion through its upcoming bond auction. The auction is scheduled for December 16, 2024, with settlement slated for December 18, 2024.){kind=link}