The Federal Government of Nigeria, via the Debt Management Office (DMO), has announced plans to raise N100 billion through a domestic bond auction scheduled for June 23, 2025. The move is part of the government’s broader strategy to finance the 2025 national budget and manage public debt through local borrowing. The offering comprises a N50 billion 5-year reopening bond and a N50 billion 7-year new bond, both set to settle on June 25, 2025.
The bond issuance falls under the legal framework of the DMO Act of 2003 and the Local Loans Act, ensuring legitimacy and alignment with national fiscal policy. The 5-year bond, tagged FGN APR 2029, carries a fixed coupon rate of 19.30%, while the 7-year bond, FGN JUNE 2032, has a coupon rate of 19.89%. The bonds are priced at N1,000 per unit, with a minimum subscription of N50,001,000, and must be purchased in additional multiples of N1,000.
Interest on both bonds will be paid semi-annually, offering a steady income stream for investors. The bonds will be repaid through bullet repayment at maturity. Unlike the May 2025 auction that offered a combined N300 billion in bonds, the June auction features a significantly smaller target, signaling a more measured borrowing approach for the month.
The DMO highlighted that the bonds are eligible securities under several Nigerian laws, qualifying for investment by trustees and enjoying tax exemptions under the Company Income Tax Act and Personal Income Tax Act. They are also recognized as liquid assets for banks, which can use them to meet regulatory liquidity requirements.
To facilitate access and trading, the bonds are listed on both the Nigerian Exchange Limited and FMDQ OTC Securities Exchange. The DMO has also named a set of banks, including Access Bank, Zenith Bank, and First Bank, as Primary Dealer Market Makers (PDMMs) for the transaction, ensuring liquidity and investor confidence in the market.
Source: Nairametrics