DMO Opens N1trn Dual Bond Offer Starting Today

By Samuel Akpan

Nigeria’s Debt Management Office (DMO) on Monday launched a N1 trillion Federal Government bond sale, inviting investors to fund public spending through a new 10-year note and a reopened 15-year paper.

The first tranche is a fresh N400 billion 10-year FGN bond due in September 2036 while the second is a N600 billion reopening of a 15-year bond maturing in 2038.

The reopened paper carries a 15.45 per cent coupon as the offer opened on 14 September, with settlement set for 16 September.

Units sell at N1,000 each, subject to a N50 million minimum subscription and further lots of N1,000, the DMO said.

On the reopening, successful bidders will pay the price that matches the yield-to-maturity bid clearing the auctioned volume, plus any accrued interest.

Interest will be paid twice a year. The principal will be repaid in a single bullet on each bond’s maturity date.

The securities carry the full faith and credit of the Federal Government and are charged on Nigeria’s general assets.

They qualify as trustee investments under the Trustee Investment Act and as government securities for tax relief under the Company Income Tax Act and Personal Income Tax Act.

The bonds are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange.

Banks may count them as liquid assets for liquidity-ratio calculations.

FGN bonds are fixed-income instruments the DMO issues so that investors can lend to the government.

Proceeds finance spending, including infrastructure and other public projects.