FG to auction N150bn bonds in August
DG, Debt Management Office, Patience Onih
The Debt Management Office on Tuesday disclosed that the Federal Government would offer N150bn bonds for subscription in August.
A circular by the DMO on its website showed that the breakdown of bonds comprised of three bonds worth N50bn each.
They are 10-year reopening bond to be offered at the rate of 13.98 per cent and to mature in February 2028; a 20- year reopening bond to be offered at 12.40 per cent and mature in March 2036; and the third and longest bond which is a 30-year reopening bond to be offered at 12.98 per cent and mature in March 2050.
According to the DMO, the bonds which will be auctioned on August 18.
The units of sale are N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.
According to the circular, the bonds qualify as securities in which trustees can invest under the Trustee Investment Act, and as a liquid asset for liquidity ratio calculation for banks.
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 amongst other investors.
They qualify to be listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange.
The bonds were said to be ‘backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria’.
The DMO had earlier disclosed that the Federal Government’s bonds for July worth N150bn which were auctioned were oversubscribed by N136.11bn.
The total subscription received from investors for the bonds was N286.11bn, consisting of N56.41bn for 13.98 per cent FGN February 2028 bonds, N73.44bn for 12.4 per cent FGN March 2036 bonds, and N156.26bn for 12.98 per cent FGN March 2050 bonds.
The auction result indicated that out of 57, 119 and 156 total bids for the tenures, 19, 77 and 59 were successful.
It stated that a total of N138.07bn was allotted, consisting of N31.71bn, N51.16bn and N55.2bn respectively.