• Friday, March 29, 2024
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FG to auction N150bn bonds September 25

FG pledges to ease access procedures to N2.5bn artisanal mining fund, grow investment

The Federal Government Nigeria (FGN) is set offer for subscription N150 billion worth of bonds at an auction which would be conducted on September 25, according to the Debt Management Office (DMO).

A breakdown of the amount revealed that the debt instruments include a N45 billion five-year, N50 billion ten-year, and N55 billion thirty-year reopening bonds which would be auctioned at interest rates of 12.75 percent, 14.55 percent, and 14.80 percent, respectively.

The DMO, which is offering the bonds on behalf of FGN, said in a circular released Tuesday in Abuja that the five-year re-opening bond would mature in April 2023; the ten-year reopening bond would be due in April 2029; while the thirty-year re-opening bond would mature in April 2049.

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Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit. Out of the N145 billion the Federal Government sought to raise in August across the three tenors, only N95 billion total subscriptions were recorded with a total sale of N15.03 billion.

According to the debt agency, the three bonds would have a settlement date of September 27 and the units of the sale would be N1, 000 per unit, subject to a minimum subscription of N50, 001,000 and in multiples of N1, 000 thereafter.

“For re-opening of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yieldto-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument,” it said adding that the instruments were backed by the full faith and credit of the Federal Government and were charged upon the general assets of Nigeria.

Meanwhile, the Central Bank of Nigeria (CBN) would on September 18 hold a Treasury Bills (T-bills) Primary Market Auction (PMA) to roll over the 91-day, 182-day, and 364-day instruments worth N179.75 billion expected to hit the market on Wednesday.