The Debt Management Office has offered N1.75 trillion bonds for subscription at an auction scheduled for October 19, with interest rates ranging from 15.45 percent to 19 percent per annum.
The DMO announced the offer in a circular detailing three
previously issued federal government of Nigeria (FGN) bonds being reopened to
investors.
The FGN bonds are fixed-income securities issued by the DMO
on behalf of the federal government to raise funds for public spending and
other financing needs.
The offer comprises N500 billion 10-year bond at 19 percent
interest, N800 billion 10-year bond at 16.79 percent, and N450 billion 15-year
bond at 15.45 percent.
The DMO said the settlement date for successful bids is
October 21, noting that interest will be paid semi-annually, while the
principal will be repaid in a lump sum on their respective maturity dates.
The office said investors bidding for the reopened bonds
would pay prices corresponding to their accepted yield-to-maturity bids,
alongside accrued interest where applicable.
The circular pegged the unit of sale at N1,000, with a
minimum subscription of N50.001 million and additional subscriptions in
multiples of N1,000.
The debt office said the securities qualify as investments
for trustees under the Trustee Investment Act and as government securities
under the Company Income Tax Act and Personal Income Tax Act, subject to
applicable provisions.
The agency said the bonds are listed on the Nigerian
Exchange Limited and the FMDQ OTC Securities Exchange.
“All FGN bonds qualify as liquid assets for calculating
banks’ liquidity ratios,” the circular reads.
The DMO advised interested investors to subscribe through
designated primary dealer market makers, including Access Bank, Citibank
Nigeria, First Bank of Nigeria, United Bank for Africa, Zenith Bank and
Guaranty Trust Bank.
According to the office, other designated dealers include
Stanbic IBTC Bank, FBNQuest Merchant Bank, Coronation Merchant Bank, Ecobank
Nigeria, First City Monument Bank, Standard Chartered Bank Nigeria, FSDH
Merchant Bank and Rand Merchant Bank Nigeria.
The DMO reserved the right to allot the bonds at its
discretion.
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