The Debt Management Office (DMO) has disclosed its decision to reopen two federal government bonds for auction, valued at N350 billion, for subscriptions of N1,000 per unit.
The FGN savings bond offers are targeted at retail investors with guaranteed quarterly interest payments and repayment of the principal at maturity.
The DMO said in a statement on Wednesday that the offers will be auctioned on April 28 and have their settlement date by April 30.
The debt office further said it is authorised to receive applications for bonds in two tranches, with the first being N200 billion for a five-year savings bond due to mature in April 2029, at 19.3 percent per annum.
It said the second tranche is N150 billion for a nine-year savings bond due to mature in May 2033, at an interest rate of 19.89 percent per annum.
The DMO added that 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.
“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 said.
The agency also said the interest payment is payable semi-annually, with the redemption in a bullet payment on the maturity date.
The DMO said the savings bonds qualify as securities, 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 (“PIA”) for Tax Exemption for pension funds amongst other investors,” it added.
“All FGN Bonds qualify as liquid assets liquidity ratio calculation for banks.”
The DMO further explained that the 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.
It added that all interested investors are to contact primary dealer market makers (PDMMs).
In March, the DMO reopened two federal government bonds for auction, valued at N300 billion, for subscriptions of N1,000 per unit.
