The Debt Management Office has opened subscription for two Federal Government of Nigeria bonds valued at N1tn, with the securities offered at N1,000 per unit.
The DMO said on Monday that the first offer is a new 10-year FGN bond valued at N400bn and due in September 2036.
The second offer is a N600bn reopening of a 15-year FGN bond due in 2038, with a coupon rate of 15.45 per cent per annum.
The subscription opened on September 14, while the settlement date is scheduled for September 16. The minimum subscription is N50m, with additional subscriptions allowed in multiples of N1,000.
The DMO said successful bidders for reopened bonds would pay a price corresponding to the yield-to-maturity bid that clears the auction volume, alongside any accrued interest. Interest on the bonds is payable twice a year, while the principal will be repaid at maturity.
The office said the securities are backed by the full faith and credit of the Federal Government and qualify as investments under the Trustee Investment Act, as well as government securities eligible for relevant tax exemptions under tax laws.
The bonds will be listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange and qualify as liquid assets for banks’ liquidity ratio calculations. FGN bonds are fixed-income securities issued by the DMO on behalf of the Federal Government to raise funds for government spending, including infrastructure and other public projects.
