The Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), plans to raise N350 billion in its February 2025 bond auction as part of its strategy to finance national projects and manage public debt. This target is lower than the N450 billion raised in January 2025, reflecting an adjustment in borrowing needs.
The auction, scheduled for February 24, 2025, features the reopening of two existing bonds:
- 19.30% FGN April 2029 bond – N200 billion offer size
- 18.50% FGN February 2031 bond – N150 billion offer size
Successful bidders will have their transactions settled by February 26, 2025. This issuance allows the government to secure long-term financing while providing investors with a stable and structured investment option.
Investment Terms and Bond Features
The bonds are available in units of N1,000, with a minimum investment requirement of N50,001,000. Additional investments must be in multiples of N1,000. Since these bonds are reopenings, their coupon rates remain fixed at 19.30% for the 5-year bond and 18.50% for the 7-year bond.
Investors will pay a price determined by yield-to-maturity bids at the auction and will also cover any accrued interest from the last coupon payment date to the settlement date.
Interest payments occur semi-annually, ensuring regular income for investors. Upon maturity, the principal is repaid in full through a bullet repayment system.
Why Investors Should Consider These Bonds
These bonds qualify as government securities, making them attractive to pension funds, institutional investors, and individuals. Under Nigerian tax laws, they benefit from exemptions on specific tax liabilities, particularly under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA).
Additionally, the bonds are listed on the Nigerian Exchange (NGX) and FMDQ OTC Securities Exchange, allowing investors to trade them in the secondary market for liquidity.
For the banking sector, these bonds serve as liquid assets that contribute to meeting regulatory liquidity requirements, while also generating interest income. Backed by the full faith and credit of the Federal Government of Nigeria, they present a low-risk investment option.
How to Participate
Interested investors can subscribe through Primary Dealer Market Makers (PDMMs) authorized by the DMO. These include leading financial institutions such as Access Bank, First Bank of Nigeria, Stanbic IBTC Bank, Citibank Nigeria, Guaranty Trust Bank, Zenith Bank, and others. These institutions facilitate investor participation in the auction process.
With the government’s focus on economic stability and structured debt management, this bond issuance offers a secure and profitable opportunity for investors seeking steady returns and portfolio diversification.
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