Federal Government Announces N150bn Bond Offer

The Debt Management Office (DMO) has announced the offering of three Federal Government of Nigeria bonds worth N150bn in its September 2024 auction. These bonds are re-openings of previously issued instruments and are available for purchase in units of N1,000, with a minimum subscription requirement of N50m, and additional subscriptions in multiples of N1,000.

The details of the bonds offered include:

1. N70bn April 2029 Bond: A five-year tenor with a coupon rate of 19.30%.
2. N50bn FGN February 2031 Bond: A seven-year tenor with a coupon rate of 18.50%.
3. N30bn FGN May 2033 Bond: A nine-year tenor with a coupon rate of 19.89%.

The bonds were auctioned on September 23, 2024, with settlement scheduled for September 25, 2024. Successful bidders will pay a price that corresponds to the yield-to-maturity bid that clears the auction volume, along with any accrued interest on the bonds. Interest is payable semi-annually, and the principal sum will be repaid in full at maturity.

These bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the country’s general assets. They qualify as securities in which trustees can invest under the Trustee Investment Act and are also considered government securities under the Company Income Tax Act and the Personal Income Tax Act, allowing tax exemptions for pension funds and other investors.

Additionally, the bonds are listed on the Nigerian Exchange Limited and FMDQ Securities Exchange, making them available to a broader range of investors.

Earlier in August, the DMO had also offered two Federal Government savings bonds for subscription, including a two-year bond with a coupon rate of 17.373% per annum, maturing in August 2026.