DMO offers N150 billion FGN bond for subscription in addition to FGN savings bond

The Debt Management Office (DMO) on behalf of the Federal Government of Nigeria (FGN) offers for subscription, FGN Bond worth N150.00 billion naira.

The N150 billion FGN bond is offered as re-opening, under four different tenors ranging from 10 years to 30 years, with interest rates ranging from 9.8% to 12.98%. Although there appears to be typographical error on the rate of the 25 years tenor.

The details of of the FGN Bond is as follows according to DMO;

N25,000,000,000 – 12.50% FGN JAN 2026 (10-Yr Re-opening)
N40,000,000,000 – 12.50% FGN MAR 2035 (15-Yr Re-opening)
N45,000,000,000 – 9.80% FGN JUL 2045 (25-Yr Re-opening)
N40,000,000,000 – 12.98% FGN MAR 2050 (30-Yr Re-opening)
Units of sale: N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.
The auction date is August 19,2020 while the settlement date is set at 21 August 2021.
The interest payment is made semi-annually while redemption will be a bullet repayment on the maturity date.
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.

Similarly DMO on Monday opened for subscription FGN savings bond with the following details;

2-Year FGN Savings Bond due August 12, 2022: 3.61% per annum
3-Year FGN Savings Bond due August 12, 2023: 4.61% per annum
Opening Date: August 10, 2020
Closing Date: August 14, 2020
Settlement Date: August 19, 2020
Coupon Payment Dates: November 19, February 19, May 19, August 19
Unit of sale: N1,000 per unit subject to a minimum Subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000.
The interest payment will be made quarterly, while redemption will be a bullet repayment on the maturity date.

Both FGN Bond and FGN Savings Bond are Backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria. They have the following status;

Qualifies as securities in which trustees can invest under the Trustee Investment Act.
Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors.
Listed on The Nigerian Stock Exchange.
Qualifies as a liquid asset for liquidity ratio calculation for banks

interested investors should contact the stockbroking firms appointed as distribution agents by the DMO.

Written by;

Ifunanya Ikueze