DMO to Issue N800 Billion Bonds at N1,000 Each

The Debt Management Office (DMO) has announced the upcoming auction of three Federal Government bonds valued at N800 billion, with each unit priced at N1,000 for public purchase.

In a statement released on Tuesday, February 17, the DMO indicated that the offering includes a N400 billion bond that carries an interest rate of 17.95 percent annually, set to mature in June 2032. This bond marks a re-opening after its initial issuance seven years ago.

Additionally, there will be a N300 billion bond available with a yield of 19.89 percent, maturing in May 2034, representing another re-opening after 10 years. Moreover, a N100 billion bond with an interest rate of 19 percent, due in February 2034, is also being offered as a further 10-year re-opening.

The DMO stated that the auction is scheduled for February 23, with the settlement expected on February 25, 2026.

"A minimum subscription of N50,001,000 applies, with units available at N1,000, which can be increased in increments of N1,000," the DMO clarified.

Regarding the pricing of the re-opened bonds, the agency explained that for those bonds with predetermined coupons, successful bidders will pay a price reflective of the yield-to-maturity bid that matches the auction volume, in addition to any accrued interest.

Interest payments on the bonds will occur semi-annually, with full repayment occurring as a lump sum at maturity.

The DMO pointed out that these bonds qualify as securities eligible for trustee investments as per the Trustee Investment Act. They also qualify as government securities under the provisions of both the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), which allows for tax exemptions for pension funds and specific other investors.

Furthermore, these bonds are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. The DMO remarked that all Federal Government of Nigeria (FGN) bonds are considered liquid assets for the purposes of banks' liquidity ratios.

The bonds have the full backing of the Federal Government of Nigeria and are secured against the country's general assets.

Additionally, the DMO retains the authority to allocate the bonds at its discretion, and it has encouraged interested investors to engage authorized banks for participation.