Investors Eye High Yields as Debt Office Reopens 7-Year and 10-Year Papers….
The Debt Management Office has unveiled an N800 billion Federal Government bond offer, giving institutional investors another opportunity to lock in double-digit yields amid tight liquidity conditions.
In a notice released Tuesday, the debt office said the bonds are available at N1,000 per unit, with a minimum subscription of N50,001,000 and additional investments required in multiples of N1,000.
Breakdown of the Offer
The issuance is split across three re-opened instruments:
- N400 billion at 95% per annum, maturing June 2032 (7-year re-opening)
- N300 billion at a 89% yield, due May 2034 (10-year re-opening)
- N100 billion at 19% interest, maturing February 2034 (10-year re-opening)
The auction is scheduled for February 23, with settlement set for February 25, 2026.
How Pricing Works
Because the bonds are re-openings of previously issued instruments, their coupon rates are already fixed. The DMO explained that successful bidders will pay a price aligned with the yield-to-maturity that clears the auction volume, in addition to any accrued interest.
Interest payments will be made semi-annually, while the principal will be repaid through a bullet redemption meaning the full amount is settled at maturity.
Tax Status and Listings
According to the DMO, the bonds qualify as trustee investment securities under the Trustee Investment Act. They are also recognised as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA), making them eligible for tax exemptions for pension funds and certain other investors.
The instruments are listed on Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, and qualify as liquid assets for banks’ liquidity ratio calculations.
Backed by Federal Guarantee
The debt office emphasised that the bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country.
However, it also noted that it reserves the right to allot bonds at its discretion.
Interested investors are advised to route subscriptions through authorised banks ahead of the auction date.
With yields hovering near 20 percent on longer tenors, the latest offer is expected to attract strong participation from pension funds, asset managers, and banks seeking relatively secure, high-return instruments in Nigeria’s fixed-income market.
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