FG seeks N900bn from domestic market with high-yield bonds

From Adanna Nnamani, Abuja

The Debt Management Office (DMO) has moved to raise N900 billion from the domestic debt market with the offer of three Federal Government of Nigeria (FGN) bonds carrying interest rates of up to 22.6 per cent.

The bond offer, which will be sold by auction on January 26, 2026, comprises N300 billion worth of 18.50 per cent FGN February 2031 (7-year) bonds, N400 billion of 19.00 per cent FGN February 2034 (10-year) bonds and N200 billion of 22.60 per cent FGN January 2035 (10-year) bonds. Settlement is scheduled for January 28, 2026.

According to a notice issued by the DMO on Monday, the bonds are re-openings of previously issued instruments and are being offered on behalf of the Federal Government in line with the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act.

The bonds are priced based on the yield-to-maturity bids submitted by successful investors at the auction, in addition to accrued interest, with interest payments made semi-annually. The bonds will be redeemed through bullet repayment at maturity.

Units of sale are priced at N1,000 per unit, with a minimum subscription of N50.001 million and multiples of N1,000 thereafter, making the offer largely targeted at institutional investors.

The DMO said the bonds qualify as approved securities for trustees under the Trustee Investment Act and are recognised as government securities under the Company Income Tax Act and Personal Income Tax Act, making them tax-exempt for pension funds and other eligible investors. They are also listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, and qualify as liquid assets for banks’ liquidity ratio calculations.

“FGN bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria,” the notice stated.

Interested investors are advised to channel their applications through authorised Primary Dealer Market Makers, including major commercial and merchant banks across the country.

Market analysts say the high yields attached to the offer reflect current tight liquidity conditions and elevated interest rates, while providing investors with an opportunity to lock in attractive long-term returns from government-backed securities.

The January bond auction forms part of the Federal Government’s domestic borrowing plan to fund budget needs, while offering investors safe, long-term returns and deepening the local debt market.