The Debt Management Office(DMO) has announced that the Federal Government would offer N150bn bonds for subscription in May,2021.
In a circular released on Tuesday, the DMO disclosed that the bonds are in tranches of N50 billion each.
According to the DMO, one of the bonds billed for auction is a 10-year reopening bond to be offered at the rate of 16.2884 percent and to mature in March 2027.
It also listed a second of 15- year reopening bond at an offering of 12.5 percent and mature in March 2035 and a third offering of a 30-year reopening bond at 14.8 percent with a maturity date in April 2045.
The disclosure by the DMO fixed the bonds auction date on May 19, 2021 and scheduled a settlement date of May 21, 2021.
The DMO said, “the bonds qualifies as securities in which trustees can invest under the Trustee Investment Act. Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds amongst other investors”.
The Office also said that the bonds are listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange and All FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks.
“FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.
“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”, it added.
Recall that the DMO had earlier stated that the Federal Government’s bonds offered for the month of April worth N60 billion were over oversubscribed by N215.67 billion.
According to the DMO, the total subscription received from investors for the federal government bonds was N275.67 billion, comprising N49.7 billion for 12.75 percent FGN April 2023 bonds; N107.47 billion for 12.5000 percent FGN March 2035 bonds; and N118.5 billion for 12.9800 per cent FGN March 2050 bonds.
