DMO to Sell N100bn FGN Bonds to Local Investors

June 20, 2019
FGN Bonds

By Dipo Olowookere

On Wednesday, June 26, 2019, the Debt Management Office (DMO) will auction Federal Government of Nigeria (FGN) bonds worth N100 billion at the local debt market.

A circular issued by the debt office on Tuesday said the papers would be offered in three maturities; 5-year, 10-year and 30-year.

According to the disclosure, the DMO is offering N30 billion worth of the 5-year tenor at a coupon of 12.75 percent, N40 billion worth of the 10-year maturity at a coupon of 14.55 percent and N30 billion worth of the 30-year tenor at a coupon of 14.80 percent.

For intending subscribers, they would be required to buy the bonds at N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

It was further said that 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.

The debt office has appointed some financial institutions to sell the bonds to investors and they are Access Bank, First Bank of Nigeria Ltd, Standard Chartered Bank Nigeria Ltd, Citibank Nigeria Ltd, First City Monument Bank, United Bank for Africa, Coronation Merchant Bank Ltd, FSDH Merchant Bank Ltd, Zenith Bank, Ecobank Nigeria Ltd, Guaranty Trust Bank, FBNQuest Merchant Bank Ltd and Stanbic IBTC Bank.

Business Post reports 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.

They qualify as securities in which trustees can invest under the Trustee Investment Act, 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.

They are listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange and are liquid assets for liquidity ratio calculation for banks.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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