The DMO has designated Primary Dealer Market Makers (PDMMs) to facilitate the bond subscription process. These include leading banks such as Access Bank Plc, Zenith Bank Plc, Stanbic IBTC Bank Ltd, and United Bank for Africa Plc. Interested investors are advised to approach these PDMMs for guidance on how to subscribe.
Abuja, Nigeria – The Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), has announced plans to raise N450 billion during its January 2025 bond auction.
This figure represents a significant increase compared to the N360 billion offered in January 2024 and the N120 billion issued in December 2024. The move is part of the government’s strategy to address fiscal shortfalls and meet financial obligations while providing investment opportunities for individuals and institutional investors.
Bond Details
The January 2025 auction features both re-opened and new bonds aimed at catering to various investor preferences. The offer is divided into three categories:
- Five-Year Bond: Originally issued in April 2029, this bond comes with a 19.30% coupon rate, and the government intends to raise N100 billion through its reopening.
- Seven-Year Bond: First issued in February 2031, it offers an 18.50% coupon rate and aims to generate N150 billion.
- New Ten-Year Bond: This is a fresh issuance known as the FGN January 2035 bond, targeting N200 billion.
The auction is scheduled for January 27, 2025, with a settlement date of January 29, 2025, ensuring that successful bidders can start earning interest immediately after the transaction is finalized.
Key Features
The bonds, priced at N1,000 per unit, require a minimum subscription of N50,001,000, with additional subscriptions accepted in multiples of N1,000. Investors will benefit from semi-annual interest payments and a lump-sum repayment upon maturity.
The bonds also provide significant tax advantages, qualifying for exemptions under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA). Listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, the bonds are easily tradable and recognized as liquid assets for financial institutions.
Backed by the full faith and credit of the Federal Government of Nigeria, the bonds are considered secure investment options, offering predictable returns and low risk.
How to Participate
The DMO has designated Primary Dealer Market Makers (PDMMs) to facilitate the bond subscription process. These include leading banks such as Access Bank Plc, Zenith Bank Plc, Stanbic IBTC Bank Ltd, and United Bank for Africa Plc. Interested investors are advised to approach these PDMMs for guidance on how to subscribe.
What to Note
This issuance underscores the federal government’s reliance on the domestic debt market to meet its financial needs amid global economic challenges. With competitive yields, tax exemptions, and guaranteed security, the bonds are expected to attract strong interest from investors seeking stable, fixed-income returns.
It was previously reported that the FGN plans to raise N1.8 trillion from the bond market in the first quarter of 2025, as outlined in the DMO’s newly released Bond Issuance Calendar. This schedule includes re-opened and new bonds across auctions slated for January, February, and March 2025.
This latest fundraising effort aims to reduce fiscal deficits while funding critical infrastructure projects nationwide.
Join our Channel...