The Nigerian government through the Debt Management Office (DMO), has announced plans to raise ₦450 billion in its first bond auction of 2025. This marks a significant increase compared to the ₦360 billion offered in January 2024 and the ₦120 billion raised in December 2024.
The bond issuance aims to bridge the nation’s fiscal deficit, meet financial obligations, and provide investment opportunities for both institutional and retail investors.
The January 2025 bond auction features a mix of reopened and newly issued bonds designed to cater to a range of investor preferences. It includes a five-year bond originally issued in April 2029. It carries a 19.30% coupon rate, with a target of ₦100 billion; the seven-year bond which offers an 18.50% coupon rate and seeks to raise ₦150 billion; and the ten-year bond, A new issuance called the FGN January 2035 bond, targeting ₦200 billion.
The auction is scheduled for January 27, 2025, with a settlement date of January 29, 2025, ensuring timely transfer of ownership and commencement of interest payments for successful bidders.
The bonds offer several benefits, including being available in units of ₦1,000, with a minimum subscription requirement of ₦50,001,000. Subscriptions can increase in increments of ₦1,000. There are also semi-annual interest payments where investors will receive consistent income twice a year.
Pension funds and approved investors also enjoy exemptions under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA).
Also, listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, these bonds are highly tradable. They are also recognised as liquid assets for financial institutions. It is also backed by the full faith and credit of the Nigerian government, these bonds are considered a secure investment option.
Interested investors can participate through authorised Primary Dealer Market Makers (PDMMs), including major financial institutions like Access Bank Plc, Zenith Bank Plc, Stanbic IBTC Bank Ltd, and United Bank for Africa Plc. These institutions will guide prospective investors on the subscription process.
The January bond auction is part of a broader strategy to raise ₦1.8 trillion from the bond market in the first quarter of 2025. The FGN Bond Issuance Calendar outlines a mix of reopened and new bonds scheduled for auctions in January, February, and March.
This funding drive is aimed at addressing fiscal deficits and financing critical infrastructure projects amidst global economic uncertainties. With competitive yields, tax incentives, and the security of government backing, the bonds are expected to attract strong interest from investors seeking stable returns.
