FG plans to raise N1.8tn from bond market Q1

The Federal Government is planning to raise N1.8tn from the bond market in the first quarter of 2025, according to the Debt Management Office.

The proposed issuances, detailed in the newly released FGN Bond Issuance Calendar, include a mix of re-opened and new bonds spread across three monthly auctions slated for January, February, and March 2025.

This funding effort forms part of the government’s strategy to address a projected budget deficit of N13.08tn in 2025, equivalent to 3.87 per cent of the country’s Gross Domestic Product.

The bonds will serve as a key tool for financing critical infrastructure and tackling fiscal gaps.

The bond calendar highlights the re-opening of the 19.30 per cent FGN APR 2029 bond, which has a remaining tenor of four years and three months.

The government plans to offer between N150bn and N200bn in each of the three auctions, making this bond an integral part of the overall programme.

Similarly, the 18.50 per cent FGN FEB 2031 bond, with a tenor of six years and one month as of January 2025, will also be re-opened and offered within the same range of N150bn to N200bn per auction.

In addition, a new bond, the FGN JAN 2035, will be introduced to the market, targeting investors looking for longer-term instruments.

With an original tenor of 10 years, it will be offered within the same N150bn to N200bn range.

If the government achieves the upper limit of the offer range across all three auctions, it could raise as much as N1.8tn by the end of the quarter.

The auctions are scheduled to take place on January 27, February 24, and March 24, 2025.

Although the calendar remains subject to adjustment, the structured approach highlights the government’s commitment to transparency and predictability in meeting its financing needs.

Last year, the Federal Government borrowed an estimated N5.84tn from the FGN bond market in 2024 amid a move to bridge its 2024 budget deficit.

However, the figures represent a 0.17 per cent decline when compared to the N5.85tn borrowed in 2023 through the Debt Management Office.

Total subscription to FGN bonds was N7.09tn in 2024 despite a total offer of N5.72tn.