The Debt Management Office (DMO) will offer N150 billion Federal Government of Nigeria (FGN) bonds in two separate classes next week for subscription at the primary market, according to a statement posted on the agency website.
The sum will be raised at N75 billion a piece for the 12.50% FGN FEB 2026 and 13.00% FGN JAN 2042 Re-Openings, according to DMO primary market auction circular.
In their separate notes, fixed income securities traders said they expect the stop rates to moderate – given the huge maturing open market operations (OMO) bills even as DMO might mirror the declining trend in the money market stop rate.
The bonds go for N1, 000 per unit with a minimum subscription of N50 million and in multiples of N1, 000 afterwards. The auction date for the bonds is Feb. 16, while the settlement date is Feb. 22.
“For re-opening of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned plus any accrued interest on the instrument,” the DMO explained.
It stated that interest on the FGN bonds would be payable “semi-annually” while “bullet payments would be made on the maturity date.
The DMOassured that the bonds qualify as securities in which 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 Act for Tax Exemption for Pension Funds, among other investors.
They are listed on the Nigerian Exchange and qualify as a liquid asset for liquidity ratio calculation for banks. It added that the bonds are backed by the full faith and credit of the Federal Government and charged upon the general assets of the country.
SOURCE: dmarketforces.com
