FG to raise N100bn in new bond auction

The Federal Government is offering fresh N100bn bonds for subscription through an auction scheduled for next week.

The Debt Management Office, in a circular on Tuesday, said it was authorised by the Federal Government to receive applications for the N100bn bonds.

According to the DMO, the bonds consist of a N35bn five-year bond, which was a re-opening at an interest rate of 12.75 per cent and will be due in April 2023; N35bn 10-year bond re-opening at an interest rate of 14.55 per cent and due in April 2029; and N30bn 30-year bond re-opening at an interest rate of 14.80 per cent and due in April 2049.

It said the bonds would be auctioned on May 22, with the settlement date being May 24.

The statement read in part, “The bonds are offered at N1,000 per unit, subject to a minimum subscription of N5,000 and in multiples of N1,000 and a maximum subscription of N50m.

“The bonds, which are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country, qualify as securities in which trustees can invest under the Trustee Investment Act. Interest is payable quarterly and the bullet repayment is on the maturity date.

“For re-opening 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.”

According to the debt office, the bonds also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds, among others.

It said the bonds would be listed on the Nigerian Stock Exchange and would qualify as a liquid asset for liquidity ratio calculation for banks.

The DMO said interested investors should contact Access Bank Plc, First Bank of Nigeria Limited, Standard Chartered Bank Nigeria Limited, Citi Bank Nigeria Limited, First City Monument Bank Plc, United Bank for Africa Plc, Coronation Merchant Bank Limited, FSDH Merchant Bank Limited, Zenith Bank Plc, Ecobank Nigeria Limited, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Limited and Stanbic IBTC Bank Plc.

 

Leave a Reply

Your email address will not be published. Required fields are marked *