The Debt Management Office, on behalf of the Federal Government of Nigeria (FGN), has offered for subscription four FGN bonds for August 2023 via auction.1
According to the offer circular released by the DMO, the first is an April 2029 FGN bond valued at N90 billion, at interest rate of 14.55 per cent per annum. (10-year re-opening)
The second offer is a June 2033 FGN bond, also valued at N90 billion, at interest rate of 14.70 per cent per annum. (10-year re-opening)
There is also the June 2038 FGN bond valued at N90 billion, at interest rate of 15.45 per cent per annum. (15-year re-opening)
The last offer is the June 2053 FGN bond, also valued at N90 billion, at interest rate of 15.70 per cent per annum. (30-year re-opening)
They are offered at N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.
According to the DMO, for re-openings of previously issued bonds (where the coupon is already set), bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned plus any accrued interest on the instrument.
It stated that interest is payable semi-annually while the bullet repayment (principal sum)will be made on the maturity date.
It assured that FGN bonds are backed by full faith and credit of the FGN 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 Act for tax exemption for pension funds amongst other investors.
“They are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.
“All FGN bonds qualify as liquid assets for liquidity ratio calculation for banks, ” it said.
