FG offers ₦120bn FGN bonds for subscription at 19.3% and 18.5% interest rates

The Federal Government, through the Debt Management Office (DMO), has offered two FGN bonds valued at ₦120 billion for subscription through auction.According to a statement by the DMO on Monday in Abuja, the first offer is an April 2029 FGN bond valued at ₦60 billion, at an interest rate of 19.30% per annum (five-year re-opening). The second offer is a February 2031 FGN bond, valued at ₦60 billion at an interest rate of 18.50% per annum (seven-year re-opening).“The auction date is December 16, and the settlement date is December 18. “The bonds are offered at ₦1,000 per unit subject to a minimum subscription of ₦50 million and in multiples of ₦1,000 thereafter.“Interest is payable semi-annually, while the bullet repayment is on the maturity date,” the DMO said. It said that for re-openings of previously issued bonds, successful bidders would pay a price corresponding to the yield-to-maturity that clears the volume being auctioned plus any accrued interest.According to the DMO, FGN bonds are backed by the full faith and credit of the Federal Government and are charged against Nigeria’s general assets.“They qualify as securities where trustees can invest under the Trustee Investment Act.“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax for tax exemption for pension funds amongst other investors.“All FGN bonds qualify as liquid assets for liquidity ratio calculation for banks,” it said.It said that they are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.