By Busola Aro

The Debt Management Office (DMO) has offered N425 billion worth of Federal Government of Nigeria (FGN) bonds for subscription through auction.

In a circular on Thursday, the debt office said the offering, comprising three re-openings, are scheduled for August 17, while settlement is expected on August 19.

The offer comprises N250 billion of the 22.60 percent FGN January 2035 bond, N100 billion of the 16.2499 percent FGN April 2037 bond and N75 billion of the 15.45 percent FGN June 2038 bond.

DMO said the bonds are re-openings of previously issued securities and that successful bidders will pay the price at which their bid clears the volume being auctioned, plus accrued interest on the instruments.

“The DMO reserves the right to allot the FGN Bonds at its discretion,” the office said.

“The bonds have a minimum subscription of N5,000 and can be purchased in multiples of N1,000 thereafter.”

According to the debt office, the interest is payable semi-annually, while redemption will be through bullet repayment on the maturity date.

The debt office said the bonds “qualify as securities in which trustees can invest under the Trustee Investment Act and qualify as government securities under the Companies and Allied Matters Act (CAMA) and Personal Income Tax Act (PITA), subject to applicable exemptions”.

DMO added that the bonds are also listed on the Nigerian Exchange (NGX) Limited and FMDQ OTC Securities Exchange, while all FGN bonds qualify as liquid assets for liquidity ratio calculation for financial institutions.

“The FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria,” the DMO said.

DMO said interested investors are expected to contact any of the designated primary dealer market makers, including Access Bank, Citibank Nigeria, Coronation Merchant Bank, Ecobank Nigeria, FBNQuest Merchant Bank.

Other dealers are First Bank, First City Monument Bank, FSDH Merchant Bank, Rand Merchant Bank, Guaranty Trust Bank, Stanbic IBTC Bank, Standard Chartered Bank, United Bank for Africa (UBA) and Zenith Bank.

Source: TheCable