FG Offers N150bn in Bonds with Attractive Yields to Boost Investments

Samuel Mobolaji

The Federal Government of Nigeria, through the Debt Management Office (DMO), has announced the offering of three Federal Government of Nigeria (FGN) bonds valued at N150 billion for public subscription at a unit price of N1,000.

The DMO, yesterday stated that the first bond available is the April 2029 FGN bond, valued at N70 billion, with an interest rate of 19.30 per cent per annum.

This bond is a five-year reopening. The second offer, set to mature in February 2031, is valued at N50 billion, offering an interest rate of 18.50 per cent per annum over a seven-year period.

Additionally, the May 2033 bond, which is a nine-year reopening, is valued at N30 billion, providing an interest rate of 19.89 per cent per annum.

These bonds are being offered at N1,000 per unit, with a minimum subscription of N50 million. Subsequent purchases can be made in multiples of N1,000. For the reopenings of previously issued bonds, successful bidders will pay a price based on the yield-to-maturity that clears the volume auctioned, along with any accrued interest on the instruments.

The auction for these bonds is scheduled for September 23, with the settlement date on September 25. Interest payments will be made semi-annually, and the principal sum will be repaid in full upon maturity.

The DMO emphasised that these FGN bonds are backed by the full faith and credit of the Federal Government of Nigeria, ensuring the safety of the investment. They are also charged upon the general assets of Nigeria, qualifying as securities in which trustees can invest under the Trustee Investment Act.

Furthermore, they meet the criteria as government securities for tax exemption under the Company Income Tax Act and Personal Income Tax Act, making them attractive to pension funds and other investors.

These bonds are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Limited, making them tradable on the secondary market.

The bond offering is seen as a secure and attractive investment option for institutional and high-net-worth investors, while also supporting the government’s funding initiatives for national development.