FG offers dollar-denominated bond for subscription

The Federal Government has offered one bond valued at $500 million for subscription to interested investors.

The Debt Management Office (DMO) disclosed this in a statement on Monday, August 19, 2014.

The DMO stated that the offer was a five-year domestic dollar bond due in 2029, at an interest rate of 9.75 per cent per annum.

The opening date for the offer is August 19, closing date is August 30, while the settlement date is September 6.

The DMO noted: “It is offered at $1,000 per unit subject to a minimum subscription of 10,000 dollars (10 units), and in multiples of 1,000 dollars thereafter.

“Coupon payment is semi-annually, while bullet repayment (principal sum) is on maturity date.”

It listed eligible investors as Nigerian residents, Nigerians with savings abroad, Nigerian diaspora, and qualified institutional investors.

Naira trades N1,579/$ at official market

The DMO added: “Payment shall only be made through the banking system and electronic transfers into the designated accounts.

“No cash deposits will be accepted under this transition, except where such cash deposits have been made into the domiciliary accounts for not less than 30 days prior to the date of offer.”

The DMO said the dollar-denominated bond was backed by the full faith and credit of the federal government, and granted liquid asset status by the Central Bank of Nigeria. (CBN).

It stated: “It qualifies as securities in which trustees can invest under the Trustee Investment Act.

“Qualifies as securities in which the Pension Fund Administrators can invest under the Pension Act.

“Qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors.”

It further disclosed that the dollar-denominated bond would be listed in the Nigerian Exchange Limited and FMDQ OTC Securities Exchange Limited.

The Star