The Debt Management Office (DMO) has announced the offering of four Federal Government of Nigeria bonds, totaling N360 billion, available for subscription via auction at a price of N1,000 per unit. According to a circular issued by the DMO, the bonds include a re-opening of a 10-year bond maturing in February 2028, valued at N90 billion, with an interest rate of 13.98 percent per annum. Additionally, there is a re-opening of a 15-year bond maturing in April 2032, also valued at N90 billion, offering an interest rate of 12.50 percent per annum. The third bond is a re-opening of a 20-year bond maturing in April 2037, valued at N90 billion, with an interest rate of 16.24 percent per annum. Lastly, the DMO is offering a re-opening of a 30-year bond maturing in April 2049, valued at N90 billion, with an interest rate of 14.80 percent per annum.
Investors can participate in this offering with a minimum subscription of N50 million, and subsequent investments must be in multiples of N1,000. For the re-openings of previously issued bonds, successful bidders will be required to pay a price that corresponds to the yield-to-maturity bid, which clears the volume being auctioned, in addition to any accrued interest. Interest payments on these bonds will be made semi-annually, while the principal amount will be repaid in full at maturity.
The DMO has stated that these Federal Government of Nigeria bonds qualify as securities in which trustees can invest under the Trustee Investment Act. They also meet the criteria for government securities as defined by the Company Income Tax Act and the Personal Income Tax Act, allowing for tax exemptions for pension funds and other investors. Furthermore, these bonds are listed on both the Nigerian Stock Exchange Limited and the FMDQ OTC Securities Exchange Limited. All FGN bonds are recognized as liquid assets for the calculation of liquidity ratios for banks. The bonds are backed by the full faith and credit of the Federal Government and are charged against the general assets of Nigeria. According to the News Agency of Nigeria, government securities, including FGN bonds, FGN savings bonds, and Sukuk bonds, make up the local components of government borrowings.
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