By Dipo Olowookere
The Debt Management Office (DMO) will on Wednesday, August 15, 2018 (today), raise the sum of N90 billion from the bond market.
The Federal Government of Nigeria (FGN) bonds to be issued today are re-openings of previously issued bonds, Business Post learnt.
According to the circular issued by the debt office, 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.
The DMO is expecting to receive applications from investors for N25 billion worth of the 5-year 12.75% FGN APR 2023 paper, N25 billion worth of the 7-year 13.53% FGN MAR 2025 note and N40 billion worth of the 10-year 13.98% FGN FEB 2028 paper.
The debt office disclosed that offers would be received for N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.
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.
Interested investors have been urged to contact the 13 financial institutions approved by the DMO to sell the FGN bonds.
These are Access Bank Plc, First Bank of Nigeria Ltd, Standard Chartered Bank Nigeria Ltd, Citibank Nigeria Ltd, First City Monument Bank Plc, United Bank for Africa Plc, Coronation Merchant Bank Ltd, FSDH Merchant Bank Ltd, Zenith Bank Plc, Ecobank Nigeria Ltd, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Ltd and Stanbic IBTC Bank Plc.
FGN bonds qualify as securities in which trustees can invest under the Trustee Investment Act. They also qualify 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 and are listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange.
In addition, all FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks.
Adedapo Adesanya