FG To Auction Fourth N360bn Bond

Debt Management Office (DMO) has opened an auction for its fourth tranche of the N360 billion savings bond.

Consequently, it has sought applications of 1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.

The office on Wednesday disclosed that the auction would hold on Monday, June 19, 2023, while the settlement date would be on Wednesday, June 21, 2023, and interest payment is semi-annually.

The DMO had issued the first three tranches of N90 billion in January, March and May with 13.98 percent interest and 10 years reopening. This is followed by a N90 billion bond which would be reopened after 10 years, another at 15 years, and a 30-year reopening.

“For re-openings 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,” DMO stated.

The bond qualifies as securities in which trustees can invest under the Trustee Investment Act.

“It also qualifies as government securities within the meaning of the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds amongst other investors.

“It is also listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, adding that all FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks.”

DMO promises bullet repayment (instant single payment) on the maturity date and assured interested investors that the government’s bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.