The Debt Management Office (DMO) has announced that it will restart the auction of two federal government bonds worth N350 billion for subscriptions of N1,000 each.
Retail investors are the target audience for the FGN savings bond offers, which include guaranteed quarterly interest payments and principal payback at maturity.
DMO said on Wednesday that the offers will be auctioned on April 28 and settled on April 30.
The DMO stated that it is permitted to receive bond applications in two tranches, the first being N200 billion for a five-year savings bond maturing in April 2029 at 19.3 percent per year.
According to the agency, the second tranche is N150 billion for a nine-year savings bond that would mature in May 2033 with an annual interest rate of 19.89 percent.
DMO stated that the transactions will be at N1,000 per unit, with a minimum subscription of N50,001,000, and in multiples of N1,000 afterward.
“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,” DMO said.
The agency also said the interest payment is payable semi-annually, with the redemption in a bullet payment on the maturity date.
DMO said the savings bonds qualify as securities, which trustees can invest under the Trustee Investment Act.
“Qualifies as Government securities within the meaning or Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PIA”) for Tax Exemption for pension funds amongst other investors,” the debt office said.
“Listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.
“All FGN Bonds qualify as liquid assets liquidity ratio calculation for banks.”
DMO went on to say that the FGN Bonds are backed by the full confidence and credit of Nigeria’s federal government and are charged against the country’s general assets.
The agency stated that any interested investors should contact principal dealer market makers (PDMMs).
In March, the DMO reopened the auction for two federal government bonds worth N300 billion, with subscriptions of N1,000 per unit.
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