The Debt Management Office (DMO), on behalf of the Federal Government, has offered three Federal Government of Nigeria (FGN) bonds worth N1.1 trillion for subscription.
The DMO announced the offer in a statement issued on Thursday in Abuja, fixing the subscription price at N1,000 per unit.
The first offer is a January 2035 FGN Bond valued at N250 billion under a 10-year re-opening, with an interest rate of 22.60 per cent per annum.
The second is an April 2037 FGN Bond valued at N100 billion under a 20-year re-opening, with an interest rate of 16.2499 per cent per annum.
The government also re-opened a June 2038 FGN Bond valued at N750 billion under a 15-year re-opening, offering an interest rate of 15.45 per cent per annum.
The DMO said the auction will hold on Aug. 17, while settlement is scheduled for Aug. 19.
It said investors can subscribe at N1,000 per unit, subject to a minimum subscription of N50 million and additional subscriptions in multiples of N1,000.
“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,” the DMO said.
According to the office, interest on the bonds is payable semi-annually, while the principal will be repaid in full on the maturity date.
The DMO said the bonds, like other Federal Government securities, are backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.
It added that the securities qualify for investment by trustees under the Trustee Investment Act and enjoy tax exemptions applicable to government securities under relevant tax laws.
The bonds are also listed on the Nigerian Exchange Ltd. and the FMDQ OTC Securities Exchange and qualify as liquid assets for banks’ liquidity ratio calculations.
FGN bonds are debt instruments issued by the DMO on behalf of the Federal Government to raise funds. Investors effectively lend money to the government in exchange for periodic interest payments and repayment of the principal at maturity.
The bonds are primarily targeted at institutional investors and high-net-worth individuals, including pension fund administrators, banks, insurance companies, asset managers and corporate treasury desks.
