FG to auction fourth N360bn bond in 2023

The Debt Management Office (DMO) has called for a subscription for a new N360bn savings bond.

The DMO in a statement yesterday stated that it is receiving the subscription by auction and called for applications of 1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.

Recall that the DMO had issued three N360 bonds in January, March and May.

It described the four bonds as N90bn with 13.98 per cent interest and 10 years reopening. This is followed by a N90bn bond which would be reopened after 10 years, another at 15 years and 30-year reopening.

It said the auction date is June 19, 2023 while the settlement date would be on June 21, 2023 and interest payment is semi-annually.

“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.

It added that the bond qualifies as securities in which trustees can invest under the Trustee Investment Act.

“It also 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. It is also listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange. 4. All FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks,” it said.

While stating that the government’s bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria, there will be bullet repayment on the maturity date.

It therefore urged interested investors to contact offices of its major dealers.

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