DMO offers dollar-denominated bond for subscription at $1,000 per unit

The federal government has offered a $500 million FGN bond for subscription at $1,000 per unit to interested investors.

In a statement on Monday, the Debt Management Office (DMO) said the offer is a five-year domestic dollar bond due in 2029, at an interest rate of 9.75 percent per annum.

The organisation said the offer opens on August 19, the closing date is August 30, while, the settlement date is September 6.

“It is offered at 1,000 dollars per unit subject to a minimum subscription of 10,000 dollars (10 units), and in multiples of 1,000 dollars thereafter,” DMO said.

“Coupon payment is semi-annually, while bullet repayment (principal sum) is on the maturity date.”

The agency said eligible investors include Nigerian residents, Nigerians with savings abroad, Nigerian diaspora, and qualified institutional investors.

The DMO said payment shall only be made through the banking system and electronic transfers into the designated accounts.

“No cash deposits will be accepted under this transition, except where such cash deposits have been made into the domiciliary accounts for not less than 30 days prior to the date of offer.”

According to the DMO, the dollar-denominated FGN bond is backed by the full faith and credit of the federal government of Nigeria, and granted liquid asset status by the Central Bank of Nigeria. (CBN).

“It qualifies as securities in whch trustees can invest under the Trustee Investment Act,” the agency said.

“Qualifies as securities in which the Pension Fund Administrators can invest under the Pension Act.

“Qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors.”

The DMO also said the bond would be listed in the Nigerian Exchange Limited and FMDQ OTC Securities Exchange Limited.

On August 15, Wale Edun, minister of finance, had said the bond would begin auctioning on August 19.

The minister said the initiative is aimed at boosting dollar liquidity, adding that the bond is a strategic move to channel funds into sectors that will catalyse economic growth in the country

He also said it would go a long way to stabilise the foreign exchange rate.