FG plans to raise N300bn via March bond auction
The Federal Government, through the Debt Management Office, has announced a bond offer for subscription by auction on March 24, 2025, to raise a total of N300bn this month.
The issuance comprises a N200bn five-year bond and a N100bn nine-year bond, aimed at raising funds for government financing. According to the offer circular released by the DMO, the bond sale is in line with the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004. Successful bidders will have their allocations settled on March 26, 2025.
The March 2025 bond auction will consist of two re-opened instruments: the N200bn 19.30 per cent FGN APR 2029 (5-year reopening) and the N100bn 19.89 per cent FGN MAY 2033 (9-year reopening). The bonds are being offered at N1,000 per unit, with a minimum subscription of N50,001,000, and in multiples of N1,000 thereafter.
As re-openings of previously issued bonds, the coupon rates are already set. Successful investors will pay a price based on their yield-to-maturity bid, along with accrued interest on the instrument. The bonds will pay interest semi-annually, with full repayment at maturity.
The Federal Government-backed securities qualify as trustee investment assets, making them suitable under the Trustee Investment Act. They also qualify as government securities under the Company Income Tax Act and Personal Income Tax Act, granting tax exemptions for pension funds and other institutional investors.
Additionally, they are classified as liquid assets for bank liquidity ratio calculations and are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. The DMO assured investors that the bonds are secured by the full faith and credit of the Nigerian government and are backed by the general assets of the country.
Investors can subscribe to the bonds through Primary Dealer Market Makers, which include financial institutions such as Access Bank, First Bank of Nigeria, Zenith Bank, United Bank for Africa, Guaranty Trust Bank, Stanbic IBTC, Standard Chartered Bank, and others. The DMO noted that it reserves the right to allot bonds at its discretion.
With yields set at 19.30 per cent for the five-year bond and 19.89 per cent for the nine-year bond, the FGN bonds remain a high-yield investment opportunity.
Given the current inflationary environment and the Central Bank of Nigeria’s tight monetary policy, the auction is expected to attract strong investor interest, particularly from pension funds, asset managers, and insurance firms seeking stable returns.
The bond issuance forms part of the government’s broader debt financing strategy to plug fiscal deficits and support economic projects.
