The Debt Management Office (DMO) has declared its readiness to auction FGN bonds to investors at the local debt market on Wednesday, January 20.
This was contained in a statement released by the DMO, saying that the notes are from the previously issued debt securities and they are the 10-year, 15-year, and 25-year papers.
The statement obtained by Techeconomy.ng read that the settlement date for the exercise is Friday, January 22, 2021.
The statement read further that the agency would be offering for sale N50 billion of the 10-year (16.29 percent FGN MAR 2027) bond, N50 billion of the 15-year (12.50 percent FGN MAR 2035) bond, and N50 billion of the 25-year (9.80 percent FGN JUL 2045) bond.
The DMO also noted that 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.
According to the debt office, the subscribers would be expected to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.
This medium gathered that the interested investors can purchase the bonds from any of the 13 primary dealer market markers; Access Bank, First Bank of Nigeria, Standard Chartered Bank Nigeria, Citibank Nigeria, FCMB, UBA, Coronation Merchant Bank, FSDH Merchant Bank, Zenith Bank, Ecobank Nigeria, GTBank FBNQuest Merchant Bank and Stanbic IBTC Bank.
It was learnt that the FGN bonds are supported by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.
Interests are paid two times each year and are tax-free because they qualify 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.