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Federal Government launches a ₦1.1 trillion FGN bond offer through the Debt Management Office (DMO) to raise long-term domestic financing.
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Three bond re-openings with coupon rates of 22.60%, 16.2499% and 15.45% will be auctioned on August 17, with settlement on August 19.
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DMO says the securities are backed by the full faith and credit of the Federal Government and offer tax, liquidity and exchange-trading benefits.
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The latest issuance reinforces the government’s growing dependence on the domestic debt market to finance budget deficits amid persistent fiscal and revenue pressures.
August 13, (THEWILL) — The Federal Government has returned to the domestic debt market with a ₦1.1 trillion Federal Government of Nigeria (FGN) bond offer, as the Debt Management Office (DMO) announced fresh subscriptions for three bond re-openings and fixed August 17, 2026, for the auction.
The offer, unveiled in a statement issued by the DMO on Thursday, 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.
According to the DMO, 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 DMO added that coupon payments would be made every six months, while investors would receive full repayment of their principal on the respective maturity dates.
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Bonds Carry Government Guarantee, Tax Incentives
The DMO assured investors that the securities remain among the safest financial assets in Nigeria because they are fully guaranteed by the Federal Government.
It 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.
Institutional Investors Expected To Dominate Offer
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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Background
The Federal Government has increasingly relied on the domestic bond market to finance budget deficits, refinance maturing debt obligations and support infrastructure and development projects.
FGN bonds remain the flagship instruments for long-term domestic borrowing because they are considered virtually risk-free within Nigeria’s financial system, owing to the sovereign guarantee backing them.
In recent years, the DMO has continued to expand the domestic debt market through regular bond auctions aimed at deepening Nigeria’s capital market, providing investment opportunities for institutional investors and reducing excessive dependence on short-term borrowing.
The latest ₦1.1 trillion offer comes as the government continues to balance rising expenditure demands with revenue constraints, making the domestic debt market a critical source of long-term financing while giving investors access to stable, government-backed returns.
Felix Ifijeh is a journalist with years of professional reporting experience. Known for his keen news sense, compelling storytelling and commitment to accurate, impactful reporting, he has built a reputation for turning leads into clear, engaging, and well-structured reports that resonate with readers. His work reflects deep newsroom experience and a commitment to accurate, impactful journalism.
