The Debt Management Office has offered N60Bn bonds for subscription in the Federal Government bond auction this month. The DMO said in a circular on Tuesday that it was authorised to receive applications on behalf of the Federal Government.
It said the N60Bn bonds consisted of a re-opening of N40Bn five-year bond at a rate of 12.75 per cent and two new issues of a N40Bn 10-year bond and N20Bn 30-year bond. For re-opening of previously issued bonds (where the coupon is already set), successful bidders usually pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument.
The circular said the bonds would be auctioned on April 24, 2019, and would be settled on April 26. It added that the interest on the bonds would be payable semi-annually while a bullet repayment of the redemption would be made on the maturity date.
The circular read in part, “The bonds are offered at N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter. “They qualify as securities in which trustees can invest under the Trustee Investment Act as they are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.
“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 among other investors. They are listed on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange.” The DMO said the bonds qualified as liquid assets for liquidity ratio calculation for Banks.