The Debt Management Office (DMO) has declared that bonds totaling N450 billion would be issued at an auction to be held on May 13, 2024.
The sale is a component of the government’s monthly bond auction, which aims to serve institutional and retail investors’ investment goals while supplying the nation’s financial needs.
Three different bond series, each offering investors a range of maturity choices and attractive rates, will be up for auction in May 2024. The 19.30% FGN APR 2029 bond is being reopened for five years as the first bond series. This bond, which was first issued in April 2024, will be reopened in an effort to raise N150 billion. A set coupon rate of 19.30% will help investors and provide steady earnings throughout the course of the maturity period.
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The second bond series is a seven-year reopening of the 18.50% FGN FEB 2031 bond. This bond was originally issued in February 2024 and is also set to raise N150 billion. With a coupon rate of 18.50%, it offers investors an opportunity to earn steady interest income over the long term while contributing to national development.
The final bond in this auction is a newly introduced nine-year bond, FGN MAY 2033, aiming to raise N150 billion. As a new issuance, the coupon rate will be determined based on the yield achieved at auction. Investors seeking longer-term investment opportunities will find this bond attractive due to its extended maturity and potential for significant yield.
The auction will take place on May 13, 2024, with a settlement date of May 15, 2024. Each unit will be available at N1,000, with a minimum subscription requirement of N50,001,000 and subsequent multiples of N1,000. Interest payments for all three bonds will be made semi-annually, providing investors with regular income throughout the investment period.
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All bonds will mature with a bullet repayment on their respective dates, ensuring full principal repayment. Furthermore, these bonds are backed by the full faith and credit of the Federal Government of Nigeria, which guarantees their security and charges them against Nigeria’s general assets.
In addition to being attractive investment opportunities, these bonds offer several benefits to investors. They qualify as securities under the Trustee Investment Act and are recognized as government securities under both the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), making them eligible for tax exemptions for pension funds and other qualified investors. Moreover, all FGN bonds are classified as liquid assets for bank liquidity ratio calculations and are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange.
