DMO lists N150bn FG bonds for subscription

By Kayode Tokede

The Debt Management Office (DMO), has announced the auctioning of three tranches of Federal Government bonds of N150billion at N1,000 per unit.

The DMO in a disclosure, said that the three bonds are valued at N50 billion each, with interest rates of 13.98 per cent at 10-year Re-opening, 12.40 per cent at 20 years reopening and 12.98 per cent at 30 years reopening respectively. Also, the date of the bonds is due February 2028, March 2036 and March 2050.

According to the debt office, the auction date is August 18 2021, while the settlement date is fixed at August 20 2021.

The DMO disclosure said, “N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples ofN1,000 thereafter.

“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.”

The DMO further explained that interest rates would be paid semi-annually, with bullet repayment on the maturity date.

The office said that the bonds qualify as securities in which trustees can invest under the Trustee Investment Act.

The DMO added that all Federal Government bonds qualified as liquid assets for the calculation of liquidity ratio for banks.

“Qualifies as securities in 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.”

It added, “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.

The DMO said, “the bonds are listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange,” DMO explained.

The DMO also urged interested investors to contact designated banks for application.