FG to Raise N900bn as DMO Offers High-Yield FGN Bonds to Investors
- The Federal Government plans to raise N900 billion through a new FGN bond auction
- The bonds are targeted mainly at institutional investors and are tax-exempt for eligible holders
- The issuance is part of the government’s strategy to fund budget needs
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The federal government has announced plans to raise N900 billion from the domestic debt market through the issuance of Federal Government of Nigeria (FGN) bonds, according to the Debt Management Office (DMO).
In a notice released on Monday, the DMO said the bonds will be offered to investors through an auction scheduled for January 26, 2026, with settlement expected on January 28, 2026, The Sun reported.
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The bond issuance includes three tranches: N300 billion in seven-year FGN bonds due in February 2031 with a coupon rate of 18.50 per cent; N400 billion in 10-year bonds maturing in February 2034 at 19.00 per cent; and N200 billion in another 10-year bond due in January 2035 carrying a higher interest rate of 22.60 per cent.
Previously issued instruments reoffered
According to the DMO, the bonds are re-openings of previously issued instruments and are being offered in line with the Debt Management Office (Establishment) Act of 2003 and the Local Loans (Registered Stock and Securities) Act.
The agency explained that the bonds will be priced based on yield-to-maturity bids from successful investors at the auction, alongside accrued interest.
Interest payments will be made twice a year, while principal repayment will be made in full at maturity.
Bond sells at N1,000
Each unit of the bond is priced at N1,000, with a minimum subscription of N50.001 million and additional subscriptions in multiples of N1,000, a structure that largely targets institutional investors.
The DMO also noted that the bonds qualify as approved securities under relevant tax and investment laws, making them tax-exempt for pension funds and other eligible investors.
They are listed on both the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange and qualify as liquid assets for banks’ liquidity ratio requirements.
The office stressed that FGN bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged against the country’s general assets.
Investors were advised to submit applications through authorised Primary Dealer Market Makers, including licensed commercial and merchant banks nationwide.
Market analysts say the relatively high yields reflect tight liquidity conditions and elevated interest rates, while offering investors an opportunity to secure long-term returns from government-backed instruments.
The bond sale forms part of the Federal Government’s domestic borrowing strategy to fund budgetary needs and deepen the local debt market.
Source: Twitter
DMO offers FGN bonds of N200 billion
Legit.ng earlier reported that the DMO auctioned two Federal Government of Nigeria bonds totalling N200 billion in August 2025.
Each bond unit is priced at N1,000 and offered in two segments.
The first was a new five-year bond worth N100 billion, maturing in August 2030. The second offering was another N100 billion in a seven-year reopening bond, set to mature in June 2032.
Source: Legit.ng
