DMO to auction N350bn FGN bonds at N1,000/unit

The Debt Management Office (DMO) said it will re-open two federal government bonds for auction, valued at N350 billion, for subscriptions of N1,000 per unit.

DMO disclosed this today (Wednesday)in a statement noting that the offers will be auctioned on April 28 and have their settlement date by April 30.

DMO also said that  it is authorised to receive applications for bonds in two tranches, with the first being N200 billion for a five-year savings bond due to mature in April 2029, at 19.3 percent per annum.

According to the Office, the second tranche is N150 billion for a nine-year savings bond due to mature in May 2033, at an interest rate of 19.89 percent per annum.

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 or Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PIA”) 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 liquidity ratio calculation for banks.

DMO explained that the 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.