DMO offers N360bn worth of FGN bonds at N1,000 per unit

From Abubakar Yunusa Abuja

The Debt Management Office, DMO, has offered four Federal Government of Nigeria, FGN, bonds valued at N360 billion for a subscription via auction at N1,000 per unit.

According to a circular by the DMO, the bonds on offer are re-opening of a 10-year, Feb. 2028 FGN bond, valued at N90 billion, at interest rate of 13.98 per cent per annum.

There is also re-opening of the 15-year, April 2032 FGN bond, valued at N90 billion, at 12.50 per cent rate per annum.

The third is re-opening of a 20-year, April 2037 FGN bond, valued at N90 billion, at 16.24 interest rate per annum.

The last offer is re-opening of 30-year, April 2049 FGN bond, also valued at N90 billion, at interest rate of 14.80 per cent per annum.

“They are offered at N1,000 per unit with a minimum subscription of N50 million, and in multiples of N1,000 thereafter.

“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 rate.

“Interest is payable semi-annually while the bullet repayment (principal sum) is made on maturity,” the DMO said.

It added that the FGN bonds qualify as securities in which trustees can invest under the Trustee Investment Act.

“They also 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 Stock Exchange Limited and FMDQ OTC Securities Exchange Limited.

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

It added that they were backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.

The government securities like FGN bond, FGN savings bond and the Sukuk bond constitute a local components of government borrowings.