DMO Set to Auction N300 Billion FGN Bonds at N1,000 Per Unit, Announces Date
- The federal government is offering two new bonds to the Nigerian investing public with attractive yields
- The Debt Management Office has announced that this is a risk-free investment, and the returns are also tax-free
- The commencement date for the auction of the bonds has been announced, as well as the close date
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
The Debt Management Office (DMO) has announced that auctions of the federal government bonds valued at N300 billion will begin soon.
It will be open for subscription at the rate of N1,000 per unit, and the auction of the bonds will commence on March 24.
Details of the bond auction have been provided in the DMO statement released on Tuesday, March 18.
Source: UGC
- Sales will start on March 24, with a settlement date of March 26
- It will be auctioned at a unit price of N1,000 targeting retail investors
- The FGN Bonds purchase will be subject to a minimum subscription of N50,001,000 (fifty million, one thousand naira) and in multiples of N1,000 thereafter.
Repayment plan
The CABLE reports that investors in the FGN Bonds subscription can expect guaranteed quarterly interest payments, while the principal will be repaid at maturity.
The interest can also be paid semi-annually, with the redemption expected to be in the bullet payment on the maturity date.
The statement read;
“For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument,”
There are two offers in the FGN Bonds auction. The first is a five-year savings bond at 19.30% returns per annum, due to mature in April 2029.
The second offer from the DMO is a nine-year savings bond at 19.89% returns per annum, and due to mature in May 2033.
This is similar to the two FGN bonds issued in December 2024 at 17.48% and 18.48% yield rates.
Why Nigerians should subscribe to the FGN bonds
The DMO statement urged Nigerians to take advantage of this investment opportunity as they are backed by the full faith and credit of the federal government of Nigeria, and charged upon its general assets.
These bonds qualify as government securities, and under the Company Income Tax Act and Personal Income Tax Act, will enjoy tax exemptions.
They also qualify as securities for trustees to invest in, under the Trustees Investment Act, and are listed on the Nigerian Exchange Limited ( NGX), making them also a liquid asset for liquidity ratio calculation for banks.
Source: Getty Images
The DMO statement about bonds says;
"When you buy FGN Bonds, you are lending to the FGN for a specified period of time. The FGN Bonds are considered as the safest of all investments in domestic debt market because it is backed by the ‘full faith and credit’ of the Federal Government, and as such, it is classified as a risk free debt instrument.
"They have no default risk, meaning that it is absolutely certain your interest and principal will be paid as and when due. The interest income earned from the securities are tax exempt."
DMO opens two savings bonds
In related news, the Debt Management Office (DMO) has opened two Federal Government Savings bonds for subscription for March 2025.
The bonds were offered at a quarterly interest rate of 16.64% and 17.64 and would mature in 2027 and 2028, respectively.
The subscription date opened on March 3, 2025, and closed on March 7, 2025, and offered at the rate of N1,000 per unit.
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Source: Legit.ng
