Federal Government Reopens N350 Billion Bond Auction, Invites Public Participation at N1,000 Per Unit
In a strategic move to deepen domestic investment and finance national development projects, the Federal Government of Nigeria has announced the reopening of two existing bonds through the Debt Management Office (DMO). The offer is valued at N350 billion, with investment units priced affordably at N1,000 per unit, encouraging wider participation among Nigerians, especially retail investors.
This initiative is part of the Federal Government’s broader fiscal strategy to mobilize long-term domestic capital, reduce reliance on external borrowing, and promote national financial inclusion by offering accessible and safe investment instruments to the public.
Key Details of the Bond Auction
The DMO disclosed that the bond auction will take place on Monday, April 28, 2025, with successful transactions to be settled by Wednesday, April 30, 2025. The auction involves two reopened Federal Government bonds:
- Five-Year FGN Bond
- Tenor: Matures in April 2029
- Interest Rate: 19.30% per annum
- Offer Size: N200 billion
- Nine-Year FGN Bond
- Tenor: Matures in May 2033
- Interest Rate: 19.89% per annum
- Offer Size: N150 billion
These bonds are structured to pay interest semi-annually, meaning investors will receive returns twice a year until the bond matures, when the full principal amount will be repaid in one lump sum.
Pricing and Subscription Requirements
- Unit Price: N1,000 per bond
- Minimum Subscription: N50,001,000
- Additional Increments: In multiples of N1,000
As these are re-openings of previously issued bonds, the coupon rates remain fixed. However, the price payable by successful bidders will depend on the yield-to-maturity bid that clears the auction volume. Investors should also be aware that they will pay any accrued interest since the last interest payment date.
Why These Bonds Matter: Investor Benefits and Guarantees
Investing in these Federal Government bonds provides a range of compelling advantages:
- Guaranteed Returns: Fixed interest payments offer income stability in a volatile market.
- Safety and Credibility: These bonds are backed by the full faith and credit of the Federal Government of Nigeria.
- Tax Incentives: Qualify for exemptions under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA), especially beneficial to pension funds.
- Regulatory Recognition:
- Recognized under the Trustee Investment Act for trustee portfolio inclusion
- Accepted as liquid assets for commercial banks’ liquidity ratio calculations
- Fully listed on the Nigerian Exchange (NGX) and FMDQ OTC Securities Exchange, ensuring transparency and secondary market liquidity
How to Participate
Interested investors—individuals, institutions, pension fund administrators, and fund managers—are advised to contact their Primary Dealer Market Makers (PDMMs), who are licensed by the DMO to handle bond auctions and secondary market trading.
These PDMMs play a crucial role in facilitating access to the auction and providing advisory services to prospective investors regarding bid strategies, interest rate forecasts, and market dynamics.
Conclusion
The reopening of the N350 billion bond auction reflects the Federal Government’s continued commitment to prudent fiscal management and inclusive economic growth. By making these instruments accessible at just N1,000 per unit, the government is inviting ordinary Nigerians, not just institutional investors, to become active participants in national development while earning consistent and competitive returns on their investments.
This initiative marks a promising opportunity for wealth preservation and growth, especially in a time when stable, risk-averse investment options are in high demand.
