The Debt Management Office (DMO) has announced the Federal Government’s plans to auction three bonds worth N150 billion in a September offering. According to a statement released by the DMO, the bonds represent re-openings of previously issued instruments and are set to be sold in units of N1,000, with a minimum subscription requirement of N50 million.
The auction, scheduled for September 23, 2024, includes the following bonds:
- N70bn April 2029 Bond: This bond features a coupon rate of 19.30% and a five-year tenor.
- N50bn FGN February 2031 Bond: This bond offers an 18.50% coupon rate for a seven-year tenor.
- N30bn FGN May 2033 Bond: With a coupon rate of 19.89%, this bond has a nine-year tenor.
Settlement for successful bids will take place on September 25, 2024. The DMO stated that bidders will pay a price determined by the yield-to-maturity bid that clears the volume auctioned, along with any accrued interest on the bonds.
Interest on the bonds is payable semi-annually, with the principal amount to be repaid in full upon maturity. The DMO emphasized that these bonds are backed by the full faith and credit of the Federal Government of Nigeria and are secured against the country’s general assets.
Moreover, the bonds qualify as securities in which trustees can invest under the Trustee Investment Act, and they are recognized as government securities under both the Company Income Tax Act and the Personal Income Tax Act, making them eligible for tax exemptions for pension funds and other investors.
These bonds are also listed on the Nigerian Exchange Limited and the FMDQ Securities Exchange, enhancing their accessibility and liquidity in the market.
In a related development, last month, the DMO offered two Federal Government savings bonds for subscription at N1,000 per unit, including a two-year FGN savings bond due on August 21, 2026, with a coupon rate of 17.373% per annum.
Investors are encouraged to consider these offerings as a secure option for portfolio diversification and income generation.
