‘N1,000 per unit’ — DMO to auction N300bn FGN bonds on March 24

The Debt Management Office (DMO) says it will reopen two federal government bonds for auctioning, valued at N300 billion, for subscriptions of N1,000 per unit.

The FGN savings bond offers are targeted at retail investors with guaranteed quarterly interest payment and repayment of the principal at maturity.

In a statement on Tuesday, DMO said the offers will be auditioned on March 24 and has its settlement date by March 26.

DMO said the transactions will be at N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.

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

“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 said.

Providing more details on the investment opportunity, the agency said the first offer is a five-year savings bond due to mature in April 2029, at 19.30 percent per annum.

The second issuance, DMO said, is a nine-year savings bond due to mature in May 2033, at an interest rate of 19.89 percent per annum.

DMO said the savings bonds, like all other government securities, are backed by the full faith and credit of the federal government and charged upon the general assets of Nigeria.

The agency added that they also qualify as securities in which trustees can invest under the Trustees Investment Act,

“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption and pension funds, amongst other investors,” the debt office said.

DMO further said the bonds are listed on the Nigerian Exchange Limited ( NGX) and qualify as a liquid asset for liquidity ratio calculation for banks.