The Debt Management Office (DMO) announced that it would reopen two Nigerian federal governments (FGNs) for public auction of bonds, with a total value of 350 billion guilds, with a subscription price of N1,000.
Savings bonds are designed for retail investors and offer guaranteed quarterly interest payments and full repayment of principal due.
According to a statement released on Wednesday, April 23, the auction is scheduled to be held on April 28 and settled on April 30. The bond quote will be issued in two distributions. The first batches constituted the 200 billion Dutch guild bonds matured in April 2029, with an annual interest rate of 19.3%. The second commander is the 10 billion guild bond that matured in May 2033, with an annual interest rate of 19.89%.
The price per bond unit is N1,000, with a minimum subscription of N50,001,000 and subsequent subscription of N1,000. For these reopening issues, successful bidders will also pay the amount corresponding to the yield between the bonds to maturity, in the event that the coupon rate is already fixed, and will also pay in addition to any accrued interest on the bond.
Interest payment will be made in the semi-annual, with all principals paying in the payment when they are mature. The DMO stressed that under the Trustee Investment Act, these savings bonds are eligible for government securities and receive tax exemptions under the Corporate Income Tax Act (CITA) and the Personal Income Tax Act (PIA) (PIA), making them attractive to pension funds and other institutional investors.
These bonds are also listed in Nigeria Exchange Limited and FMDQ OTC Stock Exchange and are eligible for current assets calculated as bank liquidity ratios. Supported by the full faith and credibility of the Nigerian Federal Government, these bonds are guaranteed to the general assets of the state.
DMO encourages interested investors to contact any designated major dealer Market Maker (PDMMS) to participate in the auction. The initiative comes after reopening R300 billion worth of FGN bonds in March.
