FG targets N900bn in January bonds offer

The federal government, through the Debt Management Office, has offered three FGN bonds, valued at N900 billion, for subscription at N1,000 per unit.

According to a release by the DMO, the first offer is a February 2031 FGN bond (seven-year reopening), valued at N300 billion, at an 18.50 per cent interest rate per annum.

The second offer is a February 2034 FGN bond (10-year reopening), valued at N400 billion at a 19.00 interest rate per annum.

The third offer is a February 2035 FGN bond (10-year reopening), valued at N200 billion at an interest rate of 22.70 per cent per annum.
The office said that for the reopening of previously issued bonds, successful bidders will pay a price equal to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument.

“Interest is payable annually, while bullet repayment (principal sum) is on the maturity date,” it said.

The DMO said the bonds are backed by the full faith and credit of the federal government and are charged upon the general assets of Nigeria.
“They qualify as securities in which trustees can invest under the Trustees Investment Act.

“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other investors,” it said.

It said they are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange and qualify as liquid assets for the liquidity ratio calculation for banks.
(NAN)