DMO offers N200bn FGN bonds at N1,000/unit

By Elizabeth Adegbesan

The Debt Management Office (DMO) said it will open two federal government bonds for auction, valued at N200 billion, with a subscription price of N1,000 per unit.
DMO disclosed this today in a statement, noting that the offers will be auctioned on August 25th with a settlement date of August 27th.
DMO also said that it is authorised to receive applications for bonds in two tranches, with the first being N100 billion for a five-year new bond due to mature in August 2030.
According to the Office, the second tranche is N100 billion for a seven-year (re-opening) bond to mature in June 2032, at an interest rate of 17.95 percent payable semi-annually.
It noted that transactions will be at N1,000 per unit, subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.
DMO added: “For Re-openings of previously issued bonds (where the coupon is already set), 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.”
DMO also said the interest payment is payable semi-annually, with the redemption in a bullet payment on the maturity date and that the savings bonds qualify as securities, which trustees can invest under the Trustee Investment Act.
“Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds amongst other investors.
“Listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.
“All FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks.
“FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.”

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