By Modupe Gbadeyanka
On Wednesday, March 27, 2019, the Nigerian government will sell bonds worth N100 billion to investors at the local market.
A circular released by the Debt Management Office (DMO) yesterday said the debt instrument would be issued in three different tenors.
According to the debt office, it would offered N40 billion worth of the 5-year paper at 12.75 percent, another N40 billion worth of the 7-year note at 13.53 percent and N20 billion worth of the 10-year bill at 13.98 percent.
It was disclosed that investors would be allowed to subscribe N1,000 per unit subject to a minimum subscription of N50 million and in multiples of
N1,000 thereafter.
The DMO said 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.
Interested investors have been advised to contact offices of any of the following primary dealer market makers (PDMMs); 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 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 and can be used 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.
The bonds are also listed on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange and qualify as liquid assets for liquidity ratio calculation for banks.
