BREAKING: FG plans to raise N450 billion from January 2025 FGN bond auction 

Naijaonpoint observed that this figure is higher than the N360 billion offered in January 2024 and the N120 billion offered last month in December of last year.

This initiative aims to bridge the fiscal deficit and address the government’s financial obligations while providing investment opportunities for institutional and individual investors.

The first FGN bond auction this year features both reopened and new bond issuances, catering to diverse investor interests.

The auction will take place on January 27, 2025, with a settlement date of January 29, 2025. The settlement ensures that successful bidders gain ownership of the bonds shortly after the auction date, enabling them to start earning interest promptly.

These bonds are available in units of N1,000, with a minimum subscription requirement of N50,001,000. Investors may increase their subscriptions in increments of N1,000.

The bonds offer semi-annual interest payments, ensuring consistent income streams for holders. Additionally, the bonds will be redeemed in full at maturity, providing a lump-sum repayment to investors.

The bonds also come with significant tax benefits. They qualify for tax exemptions for pension funds and other approved investors under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA).

Moreover, they are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, enhancing their accessibility and tradability. For financial institutions, these bonds are recognised as liquid assets and can be used to meet liquidity ratio requirements.

The bonds are backed by the full faith and credit of the Federal Government of Nigeria. This guarantee, charged upon the general assets of the country, reinforces their appeal as a secure investment vehicle. The credibility of the issuer, combined with the reliability of regular interest payments, positions these bonds as an attractive option for investors seeking low-risk, fixed-income assets.

The DMO has made provisions for interested investors to participate in the bond auction through authorised Primary Dealer Market Makers (PDMMs). These institutions, including leading financial entities such as Access Bank Plc, Zenith Bank Plc, Stanbic IBTC Bank Ltd, and United Bank for Africa Plc, among others, will facilitate subscriptions for the bonds. Prospective investors are encouraged to liaise with these PDMMs for guidance on the subscription process.