Nigeria’s Debt Management Office (DMO), has announced plans to re-open three bond offers for the purpose of raising at least N100billion on behalf of the Federal Government.
The bonds will be auctioned Wednesday, March 27, 2019, with settlement date scheduled for Friday, March 29, 2019.
According to the circular from the DMO, the N100 billion will be raised through a N40 billion five-year reopening bond that would mature in April 2023 and be offered at 12.75%. Another N40 billion seven-year reopening bond that will mature in March 2025 will be auctioned at 13.53%, while a N20 billion 10-year bond that will mature in February 2028 will be auctioned at 13.98%.
In the issued circular, the DMO also disclosed that “the units of sale will be N1, 000 per unit, subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.
“For re-opening 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 on the instrument.”
The offered bonds qualify as securities in which trustees can invest under the Trustee Investment Act. 2, the DMO explained. It further noted that it qualifies as government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds amongst other investors.
The bonds which also qualify as liquid assets for liquidity ratio calculation for banks are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria. They are listed on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange.