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Debt Management Office offers ₦2.5 trillion FG bonds for subscription at ₦1,000 per unit

The first offer is a seven-year bond valued at ₦1.25 trillion and expected to mature in February 2031.

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The first offer is a seven-year bond valued at ₦1.25 trillion and expected to mature in February 2031. The second offer is a 10-year bond also valued at ₦1.25 trillion and expected to mature in February 2034.

The auction date is February 19, and the settlement date is February 21.

“They are issued at ₦1,000 per unit subject to a minimum subscription of ₦50 million and in multiples of ₦1,000 thereafter.

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“Interest is payable semi-annually while the bullet repayment (principal sum) is made on the maturity date,’’ the DMO stated in Abuja.

It explained that the bonds were backed by the full faith and credit of the Federal Government of Nigeria (FGN) and were chargeable on the country’s general assets.

“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 administrators amongst other investors.

“They are listed on the Nigerian Exchange Ltd. and on the FMDQ Group PLC. Securities Exchange,’’ it stated.

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According to the DMO, FGN bonds qualify as liquid assets for liquidity ratio calculation for banks. The FGN bonds and other government securities like the savings bond and the Sukuk bond constitute the local component of government borrowing.

The ₦2.5 trillion bonds offer is part of the new domestic borrowing of six trillion naira in the 2024 Appropriation Act. The National Assembly also approved the securitisation of seven trillion naira in “Ways and Means’’ advances recently to the Federal Government by the CBN.

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