DMO to auction N150bn FGN bonds in May

The Debt Management Office (DMO) has announced the offer of three federal government bonds valued at N50 billion each for subscription by auction in May.

This is contained in a circular issued by DMO on its website on Tuesday.

A bond is a fixed income instrument that represents a loan made by an investor to a borrower — typically corporate or government.

According to the circular, the first is a 10-year reopening bond to be offered at the rate of 16.2884 percent with a maturity date in March 2027; the second is a 15-year reopening bond to be offered at 12.50 percent with a maturity date in March 2035; while the third is a 30-year reopening bond to be offered at 14.80 percent and mature in April 2049.

DMO said the bonds will be auctioned on May 19, 2021, while settlement date will be on May 21, 2021.

It said the unit of sale is N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.

The agency further said that the interest is payable semi-annually with the redemption expected to be in bullet payment on the maturity date.

It had earlier disclosed that the total subscription received from investors for the federal government bonds for April was N265.68 million comprising of N34.69 billion for 16.2884 percent FGN March 2027 bonds; N56.13 billion for 12.50 percent FGN March 2035 bonds; and N174.86 for 9.80 percent FGN July 2045 bonds.

The auction result showed that out of 50, 75 and 184 total bids, 23, 43 and 91 were successful.

It also indicated that a total of N157.972 billion was allotted, comprising of N22.97 billion, N38.78 billion and N96.202 respectively.