The Federal Government of Nigeria (FGN) has launched N360 billion in bonds for subscriptions through the Debt Management Office’s monthly auction schedule for August 14, 2023.
The first is a N90 billion April 2029 FGN bond with a 14.55 percent annual interest rate, according to an offer circular made public by the DMO. (10 years after closing). According to MarketForces Africa, the organization has generated more than N4 trillion for the Nigerian government in the previous seven months.
The second offer, according to the auction calendars, is a June 2033 FGN bond with a N90 billion face value and an interest rate of 14.70 percent annually. The ten-year reopening
Additionally, there is the N90 billion, 15.45% annual interest rate, June 2038 FGN bond. (15 years after closing) The June 2053 FGN bond, similarly valued at N90 billion and with an interest rate of 15.70% annually, is the final offer. thirty-year reopening
Following a minimum subscription of N50 million, they are offered for N1,000 per unit and in multiples of N1,000 thereafter. The DMO states that bidders will pay a price proportional to the yield-to-maturity bid that clears the volume being auctioned plus any accumulated interest on the instrument for re-openings of previously issued bonds (where the coupon is already established).
It was indicated that although the bullet payments (principal sum) would be made, interest would be paid semi-annually.
“They qualify as securities in which trustees can invest under the Trustee Investment Act
“They 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 Exchange Limited and FMDQ OTC Securities Exchange. All FGN bonds qualify as liquid assets for liquidity ratio calculation for banks, ” it said. DMO Opens N360bn FGN Bonds for Subscription Naira
