Nigeria Offers N150bn in Bonds as Government Seeks to Bolster Public Finances

Nigeria’s Debt Management Office (DMO) has announced the reopening of three bonds, collectively worth N150 billion, for its September auction as part of efforts to shore up the Federal Government’s public finances. The bonds, available for subscription from September 23, will be sold in units of N1,000, with a minimum subscription of N50 million and additional investments to be made in multiples of N1,000.

According to a statement from the DMO, the bonds on offer include an N70 billion April 2029 bond with a 19.30% coupon rate for a five-year tenor, an N50 billion bond maturing in February 2031 with an 18.50% coupon rate for a seven-year tenor, and a nine-year bond worth N30 billion maturing in May 2033 with a 19.89% coupon rate.

The bonds are aimed at attracting institutional and high-net-worth investors looking for secure, long-term investment opportunities. Successful bidders will pay a price corresponding to the yield-to-maturity bid that matches the volume auctioned, with accrued interest on the bonds payable in addition to the principal sum.

Interest on these bonds will be disbursed semi-annually, while the principal will be repaid in full upon maturity. The DMO reassured potential investors that the bonds are backed by the full faith and credit of the Federal Government of Nigeria, and are secured by the country’s general assets.

As part of their attractiveness to investors, the bonds qualify as securities under the Trustee Investment Act and are recognisedfor tax exemptions under the Company Income Tax Act and the Personal Income Tax Act for pension funds and other institutional investors. They are also listed on both the Nigerian Exchange Limited and FMDQ Securities Exchange, further enhancing their marketability.

This latest offering follows the DMO’s August issuance of two Federal Government savings bonds, which were available at N1,000 per unit. The two-year bond, due in 2026, carried a 17.373% coupon rate, marking a strong interest rate environment as the government continues to rely on domestic borrowing to bridge its fiscal deficit.

As the Federal Government ramps up its borrowing programme, the latest bond auction signals Nigeria’s continued reliance on debt markets to stabilise its economy amid rising inflation and global uncertainties.