New 10-year bond, 15-year reopening attract investors at N1,000 per unit…
The Federal Government has opened subscription for two bonds valued at a combined N1tn, as it seeks to raise additional funds through the domestic debt market.
The Debt Management Office, DMO, announced the offers on Monday, with both Federal Government of Nigeria bonds priced at N1,000 per unit.
Under the offer, investors can subscribe to a new 10-year FGN bond worth N400bn, which is scheduled to mature in September 2036.
The second security is a N600bn reopening of an existing 15-year FGN bond due to mature in 2038. The bond carries a coupon rate of 15.45 per cent per annum.
Subscription for both securities opened on September 14, with settlement scheduled for September 16.
The DMO said investors must make a minimum subscription of N50m, while additional subscriptions can be made in multiples of N1,000.
For the reopened 15-year bond, successful bidders will pay a price determined by the yield-to-maturity bid that clears the volume on offer, in addition to any accrued interest.
The debt office said investors would receive interest payments twice a year, while the principal amount would be repaid in full when the bonds mature.
The securities are backed by the full faith and credit of the Federal Government and are charged upon the general assets of Nigeria, according to the DMO.
The bonds will also be listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, making them tradable in the domestic capital market.
The DMO further said the securities qualify as liquid assets for the purpose of calculating banks’ liquidity ratios.
FGN bonds are fixed-income instruments issued by the DMO on behalf of the Federal Government to mobilise funds for government spending, including infrastructure development and other public projects.
The latest offer provides investors with access to long-term government securities while giving the Federal Government another avenue to raise funds from the domestic market.
