DMO Releases N360 Billion FGN Bonds For Subscription

FGN Bond For Jan. 2021 Oversubscribed

The Debt Management Office (DMO) held a primary market auction on Tuesday to sell four Federal Government of Nigeria (FGN) Bonds worth N360 billion. The initial offer, according to the DMO, is a February 2028 FGN Bond priced at N90 billion (10-year re-opening), with an interest rate of 13.98% per annum.

The second sale is a N90 billion April 2032 FGN Bond with a 15-year reopening period and an interest rate of 12.50 percent per annum. There is also the April 2037 FGN Bond, priced at N90 billion (20-year re-opening), with an annual interest rate of 16.2499 percent.

The fourth offer is April 2049 FGN Bond valued at N90 billion (30-year reopening), at an interest rate of 14.80 per cent per annum. According to the DMO, the Bonds 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 on the instrument.

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

It said that the bonds were backed by the full faith and credit of the Federal Government of Nigeria, and were 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 the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds amongst other investors.

“They are listed on the Nigerian Stock Exchange Limited and FMDQ OTC Securities Exchange.

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

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