DMO offers N2.5trn FGN bonds for subscription at N1,000 per unit

The Debt Management Office has offered two Federal Government of Nigeria bonds valued at N2.5 trillion for subscription at N1,000 per unit.

The first offer is a seven-year bond valued at N1.25 trillion and expected to mature in February 2031.

The second offer is a 10-year bond also valued at N1.25 trillion and expected to mature in February 2034.

Auction date is Feb. 19, and settlement date is Feb. 21.

“They are issued at N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter. “Interest is payable semi-annually while the bullet repayment (principal sum) is made on maturity date,” the DMO stated in Abuja.

It explained that the bonds were backed by the full faith and credit of the Federal Government of Nigeria (FGN) and were chargeable on the country’s general assets.

“They qualify as securities in which trustees can invest under the Trustees Investment Act.

“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds administrators amongst other investors.

“They are listed on the Nigerian Exchange Ltd. and on the FMDQ Group PLC. Securities Exchange,” it stated.

According to the DMO, FGN bonds qualify as liquid assets for liquidity ratio calculation for banks.

The FGN bonds and other government securities like the savings bond and the Sukuk bond constitute the local component of government borrowing.

The N2.5 trillion bond offer is part of the new domestic borrowing of six trillion naira in the 2024 Appropriation Act.

The National Assembly also approved the securitisation of seven trillion naira “Ways and Means” advances recently to the Federal Government by the CBN.