Four Federal Government of Nigeria bonds valued at N360 billion have been made available by the Debt Management Office for subscription via auction at N1,000 per unit.
According to The Punch, a circular from the DMO states that the bonds being offered are a 10-year, N90 billion FGN bond with a new opening date of February 2028 and an interest rate of 13.98% per annum.
A 15-year, N90 billion FGN bond that matures in April 2032 will also be reopened at a rate of 12.50 percent annually.
The third is the reopening of a N90 billion, 20-year, April 2037 FGN bond with a 16.24 percent interest rate.
The final offer is the reopening of a N90 billion, 30-year, April 2049 FGN bond with a 14.80% annual interest rate.
“With a minimum subscription of N50 million, they are provided for N1,000 per unit, and after that, in multiples of N1,000.
Successful bidders for previously issued bonds will pay a price that is equal to the yield-to-maturity bid that covers the volume being auctioned plus any interest that has accrued.
“Interest is paid semi-annually, with the bullet repayment (principal sum) made at maturity,” according to the DMO.
In addition, it stated that the FGN bonds met the requirements to be considered securities under the Trustee Investment Act.
“They also qualify as government securities for tax exemption for pension funds and other investors under the Company Income Tax Act and Personal Income Tax Act, respectively.
They are traded on the FMDQ OTC Securities Exchange Limited and the Nigerian Stock Exchange Limited, respectively.
For the purposes of calculating banks’ liquidity ratios, “all FGN bonds qualify as liquid assets,” it said.
Additionally, it stated that they were secured by the general assets of Nigeria and backed by the Federal Government’s full confidence and credit.
According to The News Agency of Nigeria, local government borrowings are made up of government securities including FGN bonds, FGN savings bonds, and Sukuk bonds.