25th January, 2023
By Kadiri Abdulrahman
The Debt Management Office (DMO) has put four Federal Government of Nigeria (FGN) bonds worth N360 billion up for auction at N1,000 per unit.
According to a DMO circular, the bonds on offer are the reopening of a 10-year, N90 billion FGN bond maturing in February 2028, with an interest rate of 13.98 percent per annum.
The 15-year, April 2032 FGN bond, valued at N90 billion, is also being reopened at a rate of 12.50 percent per annum.
The third is the reopening of a 20-year, April 2037 FGN bond with a face value of N90 billion and an annual interest rate of 16.24 percent.
The final offer is the reopening of a 30-year, N90 billion FGN bond maturing in April 2049. at an interest rate of 14.80 percent 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 the 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 a liquid asset for liquidity ratio calculations for banks,” it said.
It added that they were backed by the full faith and credit of the Federal Government and charged against the general assets of Nigeria.