Market News

By Joseph Chibueze, Abuja

The Debt Management Office (DMO) has announced plans to raise N300 billion for the Federal Government through the March 2025 bond auction. The decision is part of a broader plan to raise N1.8 trillion from the bond market during the first quarter of 2025 to bridge the fiscal deficit while providing investment opportunities for both institutional and individual investors.

The DMO, in a statement on its official X handle on Tuesday, said the bond auction, scheduled for March 24, 2025, features a combination of reopened bonds, designed to appeal to a diverse range of investors.

Settlement for the auction is set for March 26, 2025, ensuring successful bidders promptly gain ownership and begin earning interest. The offer includes two categories of bonds. The first is a five-year bond with a 19.3 per cent coupon rate, originally issued in April 2029, through which the government aims to raise N200 billion.

The second offer is a nine-year bond, first issued in May 2033, carrying a 19.89 per cent coupon rate, with a target of N100 billion. Together, the bonds form a significant part of the government’s domestic borrowing strategy for the year with a fiscal deficit estimated to exceed N13 trillion.

The bonds are available in units of N1,000, with a minimum subscription set at N50,001,000. Investors may increase their subscriptions in increments of N1,000.

They offer semi-annual interest payments, ensuring consistent income for holders and will be redeemed in full upon maturity, providing a lump-sum repayment.
According to the DMO, tax exemptions under the Company Income Tax Act and the Personal Income Tax Act apply to the bonds, making them particularly attractive to pension funds and other approved investors.

Listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, the bonds are easily accessible and tradable. Also, financial institutions can use them to meet liquidity ratio requirements as they are recognised as liquid assets.

The bonds are backed by the full faith and credit of the Federal Government of Nigeria, adding a layer of security for investors.
The government guarantee, charged upon the country’s general assets, also enhances the appeal of these bonds as a low-risk investment option.
Combined with reliable interest payments, they offer a stable and predictable return for investors seeking fixed-income assets.

To participate in the auction, prospective investors must subscribe through authorised Primary Dealer Market Makers such as Access Bank, Zenith Bank, Stanbic IBTC Bank and United Bank for Africa.

This bond issuance is a part of the Federal Government’s strategy to leverage the domestic debt market to address fiscal deficits and fund critical infrastructure projects amidst global economic uncertainties.