FG Opens N1.1tn Bond Offer to Investors

(Director-General of DMO, Patience Oniha. Photo by Nairametrics)

The Debt Management Office has announced a debt financing offer comprising three Federal Government bonds totalling N1.1 trillion, with subscription priced at N1,000 per unit.

The first bond matures in January 2035 and carries a 10-year tenure with a value of N250 billion and an interest rate of 22.60 per cent annually.

The second offering is an April 2037 bond valued at N100 billion on a 20-year basis, bearing interest at 16.2499 per cent per annum.

The third bond, maturing in June 2038, is valued at N750 billion with a 15-year horizon and an interest rate of 15.45 per cent annually.

The auction is scheduled for August 17, with settlement occurring on August 19.

Investors may subscribe at N1,000 per unit with a minimum initial commitment of N50 million and additional investments in increments of N1,000.

For re-opened instruments where coupon rates have been previously established, winning bidders will pay a price reflecting the yield-to-maturity bid that satisfies the auctioned volume, inclusive of accrued interest.

Interest payments occur biannually throughout the bond’s tenure, with full principal repayment upon maturity.

The securities carry the full backing and credit guarantee of the Federal Government, charged against Nigeria’s general assets.

They qualify for investment by trustees under relevant legislation and benefit from tax exemptions applicable to government securities.

The bonds are traded on the Nigerian Exchange and the FMDQ OTC Securities Exchange and classify as liquid assets for banking sector liquidity ratio calculations.

These instruments represent borrowing mechanisms through which the government obtains funds in exchange for periodic interest disbursements and eventual principal redemption, targeting institutional investors, pension administrators, banks, insurers, asset managers and corporate treasury operations.