The Debt Management Office, on behalf of President Bola Tinubu’s administration, has announced an offer of three federal government bonds valued at N1.1 trillion for subscription at N1,000 per unit.
According to a statement by the DMO on Thursday in Abuja, the first offer is a January 2035 bond valued at N250 billion (10-year re-opening), at an interest rate of 22.60 per cent per annum.
The second offer is an April 2037 FGN bond valued at N100 billion (20-year re-opening), at an interest rate of 16.2499 per cent per annum. The government also reopened a June 2038 bond valued at N750 billion (15-year reopening) at an interest rate of 15.45 per cent per annum.
The statement said that the opening date for the offer is August 3, the closing date is August 7, the auction date is August 17, and the settlement date is August 19, while the coupon payment dates are November 12, February 12, May 12 and August 12.
“Auction date is August 17, and the settlement date is August 19. The FGN bonds are offered at N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter. For reopenings of previously issued bonds (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest,” it said.
The DMO said that interest is payable semi-annually, while bullet repayment is on the maturity date. It said that bonds, like all other federal government securities, are backed by the full faith and credit of the government and charged upon the general assets of Nigeria.
“They 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 exemption for pension funds, amongst other investors. They are listed on the Nigerian Exchange Ltd. and the FMDQ OTC Securities Exchange, and they qualify as liquid assets for liquidity ratio calculation for banks,” it said.
The bonds are debt instruments issued by the DMO on behalf of the federal government. They are considered risk-free investments because the full faith and credit of the Nigerian government fully backs them.
They are primarily targeted at institutional investors and high-net-worth individuals, such as pension fund administrators, commercial and merchant banks, insurance companies, asset managers, and corporate treasury desks. Their high minimum subscription thresholds make them structured specifically for large-scale institutional capital deployment.
Subscription to the bonds means lending money to the federal government, which pays interest at regular intervals and repays the principal at maturity.
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