The Federal Government of Nigeria, through the Debt Management Office (DMO), has released details of its April 2025 bond offer, seeking to raise a total of N350 billion from the domestic debt market.
The offer comprises two re-opened Federal Government of Nigeria (FGN) bonds and is part of the government’s ongoing efforts to finance the 2025 budget and manage public debt through domestic borrowing.
According to the circular issued by the DMO, the bond auction will take place on Monday, April 28, 2025, while the settlement date is scheduled for Wednesday, April 30, 2025.
The issuance is being made in line with the provisions of the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, Laws of the Federation of Nigeria 2004.
Details of the bonds offered
- The bond offer consists of two re-openings of previously issued instruments. The first is an offer of N200 billion in the 19.30% FGN APR 2029 bond, which has a maturity of five years. The second is an offer of N150 billion in the 19.89% FGN MAY 2033 bond, which has a maturity period of nine years. Since these are re-openings, the bonds retain their original fixed coupon rates of 19.30% and 19.89% respectively.
- Each unit of the bonds is priced at N1,000, with a minimum subscription amount of N50,001,000. Additional subscriptions must be made in multiples of N1,000. Although the coupon rates are predetermined, successful bidders at the auction will pay a price based on the yield-to-maturity that clears the offered volume, along with any accrued interest from the last interest payment date up to the settlement date.
- Interest on both bonds is payable semi-annually, providing bondholders with regular income during the tenor of the instruments. The bonds will be repaid in full on their respective maturity dates through bullet repayment, meaning the principal will be paid back in a single lump sum.
What you should know
These bonds retain their status as eligible securities under several Nigerian financial and tax regulations. They qualify as approved instruments for investment by trustees under the Trustee Investment Act and are recognised as government securities under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), providing tax exemptions for certain classes of institutional investors such as pension funds.
- In addition, the bonds qualify as liquid assets for banks, making them suitable for use in meeting liquidity ratio requirements. They are also listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, which ensures that investors can trade them on the secondary market if they choose to exit their positions before maturity.
- The April 2025 bond offer continues the government’s focus on deepening the domestic bond market as a reliable source of financing. With global markets still uncertain and borrowing costs abroad remaining relatively high, the Federal Government has intensified its efforts to attract long-term capital from within the Nigerian financial system.
The coupon rates of 19.30% and 19.89% reflect the current high interest rate environment and inflationary pressures in the economy. These rates are also meant to make the instruments attractive to institutional investors who seek safe and competitive returns in a tight monetary policy landscape.
