By Chibuzor Alli
The Debt Management Office (DMO) has opened subscription for N1tn worth of Federal Government of Nigeria (FGN) bonds, with investors required to commit a minimum of N50m.
The offer comprises two bonds priced at N1,000 per unit, according to a statement issued by the DMO on Monday.
The first is a new 10-year FGN bond worth N400bn and due in September 2036.
The second is a N600bn reopening of a 15-year FGN bond due in 2038, with a coupon rate of 15.45% a year.
The FGN bond subscription opened on 14 September, while the settlement date is 16 September.
“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,” the DMO said.
FGN bond subscription offers two securities
The DMO said investors participating in the reopening of the previously issued bond, where the coupon had already been fixed, would pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest.
“Interest is payable semi-annually, while bullet repayment is on the maturity date,” the DMO said.
The office said the bonds, like other Federal Government securities, were backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.
The DMO also said the securities qualified as investments for trustees under the Trustee Investment Act and as government securities under the Company Income Tax Act and Personal Income Tax Act for relevant tax exemptions.
The FGN bond subscription is open to investors seeking exposure to Federal Government securities, with the bonds carrying the backing of the Nigerian government.
FGN bonds listed on Nigerian capital markets
The DMO said the bonds were listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.
The securities also qualify as liquid assets for liquidity ratio calculations for banks.
FGN bonds are fixed-income debt securities issued by the DMO on behalf of the Federal Government. They allow investors to lend money to the government, with the proceeds used to finance government spending, including infrastructure and other public projects.
The N1tn offer consists of the N400bn 10-year bond due in September 2036 and the N600bn reopening of the 15-year bond due in 2038.
The DMO said the offer was part of the Federal Government’s securities programme.
Leave a comment