Federal Government to Raise N900 Billion Through Bond Auction

The Federal Government of Nigeria is set to raise N900 billion from the domestic debt market through a bond auction scheduled for January 26, 2026.

The Debt Management Office (DMO), acting on behalf of the Federal Government, announced the offer in a circular inviting subscriptions for three existing bond instruments being reopened to the public.

The largest tranche of the offer is the N400 billion 10-year bond maturing in February 2034, which carries a coupon rate of 19.00 per cent. This is followed by a N300 billion seven-year bond maturing in February 2031 with an 18.50 per cent coupon rate, and a N200 billion 10-year bond maturing in January 2035 with a 22.60 per cent coupon rate.

Settlement for successful bids is scheduled for January 28, 2026, two days after the auction date.

The bonds are being offered in units of N1,000 each, with investors required to subscribe to a minimum of N50,001,000 and in multiples of N1,000 thereafter.

As these are reopenings of previously issued bonds with coupons already established, successful bidders will pay a price that corresponds to the yield-to-maturity bid that clears the volume being auctioned, in addition to any accrued interest on the instruments.

Interest payments on the bonds will be made semi-annually, whilst the principal will be repaid in full on the maturity dates through a bullet repayment structure.

The Federal Government bonds qualify as securities in which trustees can invest under the Trustee Investment Act, and are recognised as government securities under the Company Income Tax Act and Personal Income Tax Act, making them eligible for tax exemption for pension funds and other qualifying investors.

The instruments will be listed on both the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, providing liquidity options for investors. Additionally, all FGN bonds qualify as liquid assets for liquidity ratio calculations for banks.

The bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of the country, providing security for investors.

The DMO has reserved the right to allot the bonds at its discretion, meaning it may adjust the final amounts issued based on market conditions and investor demand.

Interested investors have been directed to contact any of the Primary Dealer Market Makers (PDMMs) authorised to distribute the bonds. These include Access Bank Plc, Citibank Nigeria Ltd, Coronation Merchant Bank Ltd, Ecobank Nigeria Ltd, First Bank of Nigeria Ltd, First City Monument Bank Plc, FSDH Merchant Bank Ltd, FBNQuest Merchant Bank Ltd, Guaranty Trust Bank Ltd, Rand Merchant Bank Nigeria Ltd, Stanbic IBTC Bank Ltd, Standard Chartered Bank Nigeria Ltd, United Bank for Africa Plc, and Zenith Bank Plc.

The bond issuance is being conducted pursuant to the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004, which provide the legal framework for domestic borrowing by the Federal Government.