DMO offers N1trn FGN bonds at N50m minimum subscription

The Debt Management Office has opened subscription for two Federal Government of Nigeria bonds valued at N1tn, with a minimum subscription of N50m.

In a statement on Monday, the DMO said the bonds were being offered at N1,000 per unit, with additional subscriptions to be made in multiples of N1,000.

The first offer is a new 10-year FGN bond valued at N400bn and scheduled to mature in September 2036.

The second is a N600bn reopening of a previously issued 15-year FGN bond due in 2038, with a coupon rate of 15.45 per cent annually.

The offer opened on September 14, while the settlement date is September 16.

“The FGN bonds are offered at N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter,” the DMO stated.

It explained that successful bidders for the reopened bond would pay a price based on the yield-to-maturity bid that clears the auctioned volume, in addition to any accrued interest.

The office said interest on the bonds would be paid twice a year, while the principal would be repaid in full on the maturity date.

According to the DMO, the securities are backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.

The bonds also qualify as investments for trustees under the Trustee Investment Act and as government securities under the Company Income Tax Act and Personal Income Tax Act for applicable tax exemptions.

The DMO added that the bonds were listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. They also qualify as liquid assets for banks’ liquidity ratio calculations.

FGN bonds are fixed-income securities issued by the DMO on behalf of the Federal Government to raise funds for public expenditure, including infrastructure and other government projects.