DMO to raise N300bn to bridge fiscal deficit
Agency Report
The Debt Management Office (DMO) announced plans for a bond auction on 24th March 2025 to raise N300 billion for the Federal Government, as part of a broader initiative to secure up to N1.8 trillion in the first quarter of 2025.
This effort aims to bridge the fiscal deficit while providing attractive investment opportunities for both institutional and retail investors, according to analysts at Afrinvest Group.
The DMO is offering two bonds for subscription: These include N200,000,000,000.00 at 19.30% per cent FGN APR 2029 (5-Year Re-opening) and a N100,000,000,000.00 at 19.89 per cent FGN MAY 2033 (9-Year Reopening).
Both bonds are re-openings of previously issued bonds, meaning the coupon rates have already been set. Investors will pay a price corresponding to the yield-to-maturity bid that clears the auction volume, plus any accrued interest on the instrument.
The bonds are sold at N1,000 per unit, with a minimum subscription of N50,001,000 and multiples of N1,000 thereafter.
Interest is payable semi-annually, providing a steady income stream for investors.
Analysts say, with interest rates of 19.30 per cent for the 5-year bond and 19.89 per cent for the 9-year bond, these securities offer competitive returns compared to other fixed-income instruments in the market.
Another attraction is that the bonds are exempt from taxes, making them particularly attractive to pension funds and other institutional investors seeking tax-efficient investment options.
For security purposes, the bonds are backed by the full faith and credit of the Federal Government of Nigeria, the bonds are considered low-risk investments. They are also charged upon the general assets of Nigeria.
