FG offers N120bn bonds for subscription

The Federal Government, through the Debt Management Office (DMO) has offered two FGN bonds valued at N120 billion for subscription through auction.

The first offer is an April 2029 FGN bond valued at N60 billion, at an interest rate of 19.30 percent per annum (five-year re-opening), while the second offer is a February 2031 FGN bond, valued at N60 billion at an interest rate of 18.50 per cent per annum (seven-year re-opening), according to a statement by DMO on Monday.

“Auction date December 16 and settlement date is December 18, the statement said.

“The bonds are offered at N1, 000 per unit subject to a minimum subscription of N50 million and in multiples of N1, 000 thereafter. Interest is payable semi-annually, while the bullet repayment is on the maturity date,” the DMO said.

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

According to the DMO, FGN 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 Trustee Investment Act. They qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax for tax exemption for pension funds amongst other investors.

“All FGN bonds qualify as liquid assets for liquidity ratio calculation for banks,” it said

It said that they have been listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.