DMO reopens ₦450bn FGN savings bonds for subscription at auction

Announcing the offer in Abuja, the DMO said that the bonds were offered at 1,000 per unit subject to a minimum subscription of ₦50 million and in multiples of ₦1,000 thereafter.

The first offer, as announced by the DMO, is an April 2029 FGN bond valued at ₦150 billion, at an interest rate of 19.30% annum, (Five-year re-opening). The second offer is a February 2031 FGN bond worth ₦150 billion at 19.50% interest rate per annum. (Seven-year re-opening).

There is also the May 2033 FGN bond worth ₦150 billion at an interest rate of 19.89% per annum, (nine-year re-opening).

According to the DMO, the auction date is June 14, while the settlement date is June 26. It said that interest was payable semi-annually while bullet repayment (principal sum) would be made on the maturity date.

“For re-openings of previously issued bonds, 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,” it added.

The debt office said that FGN bonds were backed by the full faith and credit of the Federal Government, and charged upon the general assets of Nigeria.

“They qualify as securities in which trustees can invest under the Trustees Investment Act.

“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other investors.

“They are listed on the Nigerian Exchange Limited and FMDQ ODC Securities Exchange,” the DMO stated.

It also said that FGN bonds qualified as liquid assets for liquidity ratio calculation for banks. 

The News Agency of Nigeria (NAN) reports that the ₦450 billion FGN bond offer constitutes the local component of the government borrowing plan, to bridge the nine trillion Naira deficit in the 2024 budget.