Nigeria Introduces 25-Year Bond to Investors

By Modupe Gbadeyanka

A new bond maturity has been introduced by Nigeria through the Debt Management Office (DMO) as part of efforts to give investors more options.

The new paper has a tenor of 25 years and would be offered for sale this week when the debt office auctions some bonds to investors.

Business Post gathered that the creation of the fresh maturity comes months after Nigeria, Africa’s largest economy, also introduced a 30-year bond, which has been embraced by subscribers.

On Wednesday, July 22, 2020, the debt office will sell some bonds to investors at the local debt market to raise funds for the revised 2020 budget.

During the exercise, the DMO will auction N130 billion worth of the FGN Bonds to subscribers across four tenors instead of the usual three maturities.

The reason for the increase in the number tenors of the notes is because of the introduction of the new 25-year bonds created by the DMO.

The debt office is offering N25 billion worth of the 10-year 12.50 per cent FGN bond, N35 billion worth of the 15-year 12.50 per cent FGN bond, N35 billion worth of the 25-year FGN bond and N35 billion worth of the 30-year 12.98 per cent FGN bond.

Business Post reports that apart from the 25-year paper, which was newly introduced, the other three notes are all reopening.

To buy the bonds, investors would be required to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter, while the interest would be paid semi-annually, with the main funds for the subscription paid on the maturity date.

The DMO has asked interested investors to approach the following banks; Access Bank, First Bank of Nigeria, Standard Chartered Bank Nigeria, Citibank Nigeria, FCMB, UBA, Coronation Merchant Bank, FSDH Merchant Bank, Zenith Bank, Ecobank Nigeria, GTBank, FBNQuest Merchant Bank and Stanbic IBTC Bank.