Two N2.5 trillion bonds issued by the Federal Government of Nigeria are available for subscription at N1,000 per from the Debt Management Office.
A N1.25 trillion seven-year bond with a maturity date of February 2031 is the first offering. The second offering is a N1.25 trillion 10-year bond that is scheduled to maturity in February 2034.
The dates of the auction are February 19 and the settlement is February 21. “They are issued in multiples of N1,000 following a minimum subscription of N50 million, with each unit priced at N1,000.
The DMO in Abuja said, “Interest is payable semi-annually while the bullet repayment (principal sum) is made on maturity date.”
It clarified that the bonds have the whole faith and credit of the Federal Government of Nigeria (FGN) and were chargeable on the country’s general assets.
“They qualify as securities in which trustees can invest under the Trustees 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 administrators amongst other investors.
“They are listed on the Nigerian Exchange Ltd. and on the FMDQ Group PLC. Securities Exchange,’’ it stated. According to the DMO, FGN bonds qualify as liquid assets for liquidity ratio calculation for banks.
The FGN bonds and other government securities like the savings bond and the Sukuk bond constitute the local component of government borrowing. The N2.5 trillion bonds offer is part of the new domestic borrowing of six trillion naira in the 2024 Appropriation Act.
The National Assembly also approved the securitization of seven trillion naira “Ways and Means’’ advances recently to the Federal Government by the CBN.
