Politics
FG Floats ₦1.1trn Bond Offer for August 17 Auction Date – THISAGE
The Federal Government has returned to the domestic debt market with a ₦1.1 The Debt Management Office (DMO) announced fresh N1.1 trillion subscriptions for three bond re-openings and fixed August 17, 2026, for the auction.
According to the DMO on Thursday, the offer represents one of the largest domestic bond issuances in recent months and is to mobilise long-term capital from institutional investors to support government financing needs.
The DMO said investors can subscribe to the bonds at ₦1,000 per unit, subject to a minimum investment of ₦50 million and in multiples of ₦1,000 thereafter.
The first instrument is the January 2035 FGN Bond, a 10-year re-opening valued at ₦250 billion with a coupon rate of 22.60 percent per annum.
The second is the April 2037 FGN Bond, a 20-year re-opening worth ₦100 billion, carrying a coupon rate of 16.2499 percent.
The third and largest tranche is the June 2038 FGN Bond, a 15-year re-opening valued at ₦750 billion with an annual coupon rate of 15.45 percent.
The agency said the auction will take place on Monday, August 17, while successful bids will be settled on Wednesday, August 19.
It explained that because the securities are re-openings of existing bond issues, successful bidders would not necessarily pay the face value. Instead, they would pay a price determined by the yield-to-maturity that clears the auction, in addition to any accrued interest already earned on the bonds.
The office added that coupon payments would be made every six months, while investors would receive full repayment of their principal on the respective maturity dates.
Assuring investors that the securities remain among the safest financial assets in Nigeria because they are fully guaranteed by the Federal Government, the office said all FGN bonds are backed by the full faith and credit of the Federal Government and are charged upon the general assets of the federation.
The office further stated that the bonds qualify as approved investments for trustees under the Trustee Investment Act and also meet the definition of government securities under both the Company Income Tax Act and the Personal Income Tax Act, making them eligible for tax exemptions available to pension funds and other qualified investors.
According to the DMO, the securities are listed on both the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange, providing investors with opportunities to trade them in the secondary market before maturity.
It also noted that deposit money banks can count the instruments as liquid assets when computing their statutory liquidity ratios, making them attractive to financial institutions seeking to meet regulatory requirements while earning fixed returns.
The DMO said the structure of the bond offer is designed primarily for institutional investors because of the ₦50 million minimum subscription threshold.
The expected subscribers include pension fund administrators, commercial and merchant banks, insurance companies, asset management firms, development finance institutions and corporate treasury departments, although high-net-worth individuals with sufficient capital can also participate.
The agency explained that investing in FGN bonds simply means lending money to the Federal Government, which undertakes to pay fixed interest at regular intervals throughout the tenor of the investment before repaying the principal at maturity.
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