DMO offers N300bn FGN bonds for N1,000 per unit

The Debt Management Office (DMO) has offered three federal government bonds valued at N300 billion for subscription at N1,000 per unit.

On Friday, DMO said the first offer is a five-year bond valued at N100 billion at an interest rate of 19.30 percent per annum and is expected to mature in April 2029.

The agency said the second offer, expected to mature on February 31, is a seven-year bond valued at N100 billion at an interest rate of 18.50 percent per annum.

The last FGN bond, valued at N100 billion, with a 19.88 percent interest rate per annum, will mature in May 2033 (nine-year re-opening).

The agency added that each unit is subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

“Interest is payable semi-annually, while bullet repayment (principal sum) is on the maturity date,” the DMO said.

“For re-opening of previously issued bonds, successful bidders would pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument.”

According to the DMO, FGN bonds are backed by the full faith and credit of the federal government and are charged upon the general assets of the country.

“They qualify as securities in which trustees can invest under the Trustee Investment Act,” the agency said.

“They qualify as government securities within the meaning of company income tax Act, and personal income tax Act for tax exemption for pension funds amongst other investors.

“They are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.”

DMO also said that all FGN bonds qualify as liquid assets for liquidity ratio calculation for banks.