DMO offers N300bn FGN bonds for subscription at N1,000 per unit

The Debt Management Office (DMO) is offering three Federal Government of Nigeria (FGN) bonds valued at N300 billion for subscription at N1,000 per unit. According to the DMO, the first offer is an April 2029 FGN bond valued at N100 billion at an interest rate of 19.30 per cent per annum (five-year re-opening). The second offer is a February 2031 FGN valued at N100 billion at an interest rate of 18.50 per cent per annum (seven-year re-opening). There is also the May 2033 FGN bond, valued at N100 billion, at a 19.88 per cent interest rate per annum (nine-year re-opening). They are offered at N1,000 per unit, subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

“Interest is payable semi-annually, while bullet repayment (principal sum) is on the maturity date,” the DMO said. It said that for re-opening previously issued bonds, successful bidders would pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument. According to the DMO, FGN bonds are backed by the full faith and credit of the federal government of Nigeria and are charged upon the general assets of Nigeria. “They qualify as securities in which trustees can invest under the Trustee Investment Act. They qualify as government securities within the meaning of the Company Income Tax Act and the Personal Income Tax Act for tax exemption for pension funds, amongst other investors. They are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange,” it said. It said all FGN bonds qualify as liquid assets for liquidity ratio calculation by banks. (NAN)