FGN bonds: FG opens N1.1tn subscription for three bonds
By Aboki Forex —
The Federal Government has offered three FGN bonds worth a combined N1.1 trillion for subscription at N1,000 per unit. The auction will hold on August 17, 2026, with settlement scheduled for August 19.
The Debt Management Office (DMO) announced the reopening of the bonds on Thursday in Abuja. Investors can bid for the securities, which mature in 2035, 2037 and 2038.
Bond details
The first offer is a January 2035 FGN Bond worth N250 billion, 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, a 20-year reopening carrying an interest rate of 16.2499 per cent per annum.
The largest offer is a June 2038 FGN Bond valued at N750 billion. This 15-year reopening has a coupon rate of 15.45 per cent per annum.
How to subscribe
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 pay a price determined by the yield-to-maturity bid that clears the auction volume, alongside any accrued interest. Interest on the bonds will be paid twice a year, while the principal will be repaid in a lump sum at maturity.
Safety and incentives
The DMO described the securities as obligations of the Federal Government, backed by its full faith and credit and charged upon the general assets of Nigeria. They qualify as approved investments for trustees under the Trustee Investment Act.
Investors also enjoy tax-related exemptions under relevant provisions of the Company Income Tax Act and Personal Income Tax Act. The bonds are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, and they qualify as liquid assets for banks when calculating liquidity ratios.
Who should invest
FGN bonds are debt securities through which investors lend money to the Federal Government in exchange for periodic interest payments and repayment of principal at maturity. They suit institutional investors and high-net-worth individuals, including pension fund administrators, commercial and merchant banks, insurance companies, asset managers and corporate treasury departments.
The high minimum subscription of N50 million makes them more accessible to investors deploying substantial capital. Although FGN bonds are generally regarded as low-risk because they are government-backed, investors should still consider prevailing interest rates, bond prices and yields before participating.
For the naira and Nigerian businesses, a successful auction means the federal government can raise domestic funds to meet obligations without adding to external debt pressures. It also offers institutional investors a secure, liquid channel for long-term returns.