FGN offers ₦450 billion bonds for subscription at ₦1,000/unit

According to a release by the DMO, the first offer is the five-year re-opening of the April 2029 FGN bond valued at ₦150 billion, at an interest rate of 19.30%.

The second offer is the seven-year re-opening of the February 2031 FGN bond valued at ₦150 billion, at an interest rate of 18.50%. The third offer is a new, nine-year, May 2033 FGN bond valued at ₦150 billion.

“Auction date is the 13, and the settlement date is May 15.

“They are offered at ₦1,000 per unit subject to a minimum subscription of ₦50million and in multiples of ₦1,000 thereafter,” the DMO said.

It said that for re-openings of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned plus any accrued interest.

The agency said that interest payments would be made semi-annually while the bullet repayment (principal sum) is on the maturity date.

“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 Personal Income Tax Act for tax exemption for pension funds amongst other investors.

“They are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange,” it added.

The DMO added that all FGN bonds qualify as liquid assets for liquidity ratio calculation for banks. It urged all interested investors to contact Primary Dealer Market Makers (PDMMs) like First Bank, First City Monument Bank, Access Bank, and Citibank among others.

The News Agency of Nigeria (NAN) reports that FGN bonds, like other Federal Government securities, constitute the domestic component of government borrowing.