Abuja: The Debt Management Office (DMO), on behalf of the Federal Government, has announced an offer of three FGN bonds valued at N1.1 trillion for subscription at N1,000 per unit.
According to News Agency of Nigeria, the first offer is a January 2035 FGN Bond valued at N250 billion (10-year re-opening), with an interest rate of 22.60 percent per annum. The second offer is an April 2037 FGN bond valued at N100 billion (20-year re-opening), carrying an interest rate of 16.2499 percent per annum. The Federal Government also re-opened a June 2038 FGN bond valued at N750 billion (15-year re-opening), with an interest rate of 15.45 percent per annum.
The auction date is set for August 17, with the settlement date on August 19. The FGN bonds are offered at N1,000 per unit, subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter. For re-openings of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest.
The DMO stated that interest is payable semi-annually, with bullet repayment on the maturity date. FGN bonds, like all other Federal Government securities, are backed by the full faith and credit of the Federal Government and are charged upon the general assets of Nigeria. They qualify as securities in which trustees can invest under the Trustee Investment Act and are exempt under the Company Income Tax Act and Personal Income Tax Act for pension funds, among other investors.
FGN bonds are listed on the Nigerian Exchange Ltd., and the FMDQ OTC Securities Exchange, and qualify as liquid assets for liquidity ratio calculation for banks. These bonds are debt instruments issued by the DMO on behalf of the Federal Government and are considered risk-free investments due to their full backing by the Nigerian government.
FGN bonds primarily target institutional investors and high-net-worth individuals, such as pension fund administrators, commercial and merchant banks, insurance companies, asset managers, and corporate treasury desks. Their high minimum subscription thresholds make them suitable for large-scale institutional capital deployment. Subscription to FGN bonds means lending money to the Federal Government, which agrees to pay interest at regular intervals and to repay the principal when the bond matures.