The Debt Management Office (DMO), on behalf of the Federal Government, has announced the reopening of three Federal Government of Nigeria (FGN) bonds worth a combined N1.1 trillion for subscription. According to a statement issued by the DMO on Thursday in Abuja, the bonds are being offered at N1,000 per unit, with the auction scheduled for August 17 and settlement set for August 19, 2026.
Three FGN Bonds on Offer
The first offer is a January 2035 FGN Bond worth N250 billion, representing a 10-year reopening, with an annual interest rate of 22.60 per cent. The second is an April 2037 FGN Bond valued at N100 billion. The 20-year reopening carries an interest rate of 16.2499 per cent per annum. The largest offer is a June 2038 FGN Bond valued at N750 billion. The 15-year reopening has a coupon rate of 15.45 per cent per annum.
The DMO said investors must subscribe to a minimum of N50 million, with additional subscriptions made in multiples of N1,000. For previously issued bonds being reopened, the coupon rates remain unchanged. Successful bidders will, however, pay a price determined by the yield-to-maturity bid that clears the auction volume, alongside any accrued interest.
Interest Payments and Government Backing
The DMO said interest on the bonds would be paid twice a year, while the principal would be repaid in a lump sum when each bond reaches maturity. It described the securities as obligations of the Federal Government, backed by its full faith and credit and charged upon the general assets of Nigeria.
The bonds also qualify as approved investments for trustees under the Trustee Investment Act and enjoy tax-related exemptions applicable to qualifying investors under relevant provisions of the Company Income Tax Act and Personal Income Tax Act. The securities are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. They also qualify as liquid assets for banks when calculating liquidity ratios.
Who Can Invest in FGN Bonds?
FGN bonds are debt securities through which investors effectively lend money to the Federal Government in exchange for periodic interest payments and repayment of their principal at maturity. The instruments are particularly suited to institutional investors and high-net-worth individuals, including pension fund administrators, commercial and merchant banks, insurance companies, asset managers and corporate treasury departments.
Their relatively high minimum subscription at primary auctions, currently N50 million, makes them more accessible to investors seeking to deploy substantial amounts of capital. Although FGN bonds are generally regarded as low-risk investments because they are backed by the Federal Government, investors still need to consider factors such as prevailing interest rates, bond prices and yields before participating in an auction.
