DMO re-opens 3 FGN bonds valued at N1.1trn for subscription

Debt Management Office (DMO), on behalf of the Federal Government, has announced an offer of three FGN bonds valued at N1.1 trillion for subscription at N1,000 per unit.

According to a statement by the DMO on Thursday in Abuja, the first offer is January 2035 FGN Bond valued at N250 billion (10-year re-opening), at interest rate of 22.60 per cent per annum.

The second offer is an April 2037 FGN bond valued at N100 billion (20-year re-opening), at interest rate 16.2499 per cent per annum.

The Federal Government also re-opened a June 2038 FGN bond valued at N750billion (15-year re-opening), at interest rate of 15.45 per cent per annum.

“Auction date is Aug. 17, and the settlement date is Aug. 19. The FGN bonds are offered at N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

“For re- openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest.”

The DMO said that interest is payable semi-annually, while bullet repayment is on the maturity date. It said that FGN bonds, like all other Federal Government securities, are backed by the full faith and credit of the Federal Government and 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 Personal Income Tax Act for exemption for pension funds, amongst other investors.

“They are listed on the Nigerian Exchange Ltd., and the FMDQ OTC Securities Exchange, and they qualify as liquid assets for liquidity ratio calculation for banks, ” it said.

The News Agency of Nigeria (NAN) reports that the FGN bonds (Federal Government of Nigeria Bonds) are debt instruments issued by the DMO on behalf of the Federal Government.

They are considered risk-free investments because they are fully backed by the full faith and credit of the Nigerian government. FGN bonds are primarily targeted at institutional investors and high-net-worth individuals like pension fund administrators, commercial and merchant banks, insurance companies, asset managers, and corporate treasury desks.

Their high minimum subscription thresholds (typically starting at N50 million at primary auctions) make them structured specifically for large-scale institutional capital deployment.

Subscription to FGN bonds means one is lending money to the Federal Government, which agrees to pay interest (coupon) at regular intervals and to repay the principal when the bond matures. (NAN)