The Federal Government, through the Debt Management Office (DMO), has announced plans to raise N120 billion through the auction of two Federal Government Bonds.The auction, scheduled for December 16, 2024, will offer investors an opportunity to subscribe to reopened debt instruments, with settlement set for December 18, 2024.
The bond offering comprises a 19.30 percent April 2029 bond, a five-year reopening valued at N60 billion, and an 18.50 percent February 2031 bond, a seven-year reopening also valued at N60 billion.
Both instruments are reopenings of previously issued bonds, allowing investors to participate at current market yields.
Each bond unit is priced at N1,000, with a minimum subscription of N50,001,000 required. Investors can purchase additional units in multiples of N1,000.
The yield-to-maturity bid that clears the auction volume will determine the final price for successful bidders, along with any accrued interest.
The bonds offer attractive features to investors, including tax exemptions under the Company Income Tax Act and the Personal Income Tax Act.
They are also listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, making them tradable assets. Furthermore, they qualify as liquid assets for liquidity ratio calculations for banks.
This bond issuance is part of the federal government’s strategy to mobilize domestic funds to finance critical infrastructure projects and meet budgetary obligations.
In November 2024, the Federal Government raised over N346.155 billion at its bond auction, reflecting higher allotments despite a reduction in the amount offered.
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