FG targets N900bn in January bonds offer

The Federal Government, through the Debt Management Office (DMO), has offered three FGN bonds, valued at N900 billion for subscription at N1,000 per unit.

According to a release by the DMO, the first offer is a Feb. 2031 FGN bond (seven-year re-opening), valued at N300 billion, at 18.50 per cent interest rate per annum.

The second offer is a Feb. 2034 FGN bond (10-year re-opening), valued at N400 billion at 19.00 interest rate per annum.

The third offer is a Feb. 2035 FGN bond (10-year re-opening), valued at N200 billion at interest rate of 22.70 per cent per annum.

The office said that for re-opening of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest in the instrument.

“Interest in payable annually, while bullet repayment (principal sum) is on maturity date, ” it said.

The DMO said that FGN bonds are backed by the full faith and credit of the Federal Government and are charged upon the general assets of Nigeria.

“They qualify as securities in which trustees can invest under the Trustees Investment Act.

“They 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,” it said.

It said that they are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, and qualify as liquid assets for liquidity ratio calculation for banks.