By Dipo Olowookere
On Wednesday, May 22, 2019, the Nigerian government will conduct an auction exercise for the sale of bonds worth N100 billion.
This exercise will be carried out by the Debt Management Office (DMO) on behalf of the federal government of Nigeria.
During the bond sale, the debt office will offer three maturities; 5-year, 10-year and 30-year, all re-opening, with the settlement date fixed for May 24, 2019.
In a circular on Tuesday, the DMO said it would offer N35 billion of the 5-year note at 12.75 percent, another N35 billion of the 10-year bond at 14.55 percent and N30 billion worth of 30-year paper at 14.80 percent.
The debt office said intending subscribers would be expected to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.
They will have to approach the following financial institutions for subscription; 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.
The 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.
They are liquid assets for liquidity ratio calculation for banks and are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.
In addition, the bonds would be listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange.
Adedapo Adesanya