DMO to offer N100bn FGN bonds

The federal government, through the Debt Management Office (DMO), will issue a N100 billion bond for subscription on June 26.

In a circular posted on its website on Tuesday, the DMO said it will receive applications for the offering in three tranches, with a settlement date set for June 28.

The first is a N30 billion five-year reopening bond that will mature in April 2023, offered at 12.75%, while the second is a N40 billion 10-year reopening bond that will mature in April 2029, offered at 14.55%.

The third on offer is a N30 billion 30-year bond that will mature in April 2049, offered at 14.80%.

According to the agency, the bonds will be sold for N1,000 per unit, with a minimum subscription of N50 million and in multiples of N1,000 thereafter.

Regarding the bond’s security, the DMO said it is “backed by the full faith and credit of the Federal Government of Nigeria (FGN) and are charged upon the general assets of Nigeria.”

Interest payment to bondholders will be semi-annually, while bullet repayment will be made on maturity date.

The DMO listed 13 primary dealer market makers (PDMMs) through whom interested investors could subscribe for the bonds.

They are Access Bank Plc, First Bank of Nigeria Ltd, Standard Chartered Bank Nigeria Ltd,  Citibank Nigeria Ltd, and First City Monument Bank Plc.

Others are United Bank for Africa Plc, Coronation Merchant Bank Ltd, FSDH Merchant Bank Ltd, Zenith Bank Plc, Ecobank Nigeria Ltd, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Ltd and Stanbic IBTC Bank Plc.

This is the third time in Nigeria’s history that government will issue a bond with a 30-year maturity.

In April, a total subscription of N80.41 billion was received from investors for the first ever 30-year bond offered at N20 billion, representing a 400% oversubscription rate.

Investors also showed a stronger demand for the 30-year bond offered by government in May, with a subscription of over N100 billion compared to the N30 billion offered.

In both months, the DMO said the bulk of the subscriptions came from asset managers and insurance companies that had been seeking “long-term, good quality assets” to buy in order to match their liabilities.