According to the offer circular released by the DMO on Wednesday, the bond issuance consists of two reopened instruments: a N20 billion reopening bond and a N60 billion bond.

The N20 billion reopening is a 5-year FGN bond offered at a coupon rate of 19.30%, with a maturity date set for April 2029.

The N60 billion reopening is a 7-year bond offered at a coupon rate of 17.95%, maturing in June 2032.

The auction is scheduled for July 28, 2025, while the settlement date is set for July 30, 2025. The bonds are priced at N1,000 per unit, with a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter. Interest payments will be made twice a year.

As revealed in the circular, upon reopening previously issued bonds, successful bidders are required to pay a price corresponding to the yield-to-maturity that clears the volume being auctioned. In addition to the bid price, investors will also pay any accrued interest on the bond.

The DMO advised interested investors to contact any of the authorised Primary Dealer Market Makers (PDMMs) to indicate their interest.

The auction which took place on January 29, 2024, saw the reopening of the 10-year 16.2884% FGN MAR 2027, the 10-year 14.55% FGN APR 2029, the 10-year 14.70% FGN JUN 2033, and the 15-year 15.45% FGN JUN 2038 bonds.

Furthermore, N90 billion was offered for the 16.2884% FGN MAR 2027 bond. A subscription of N166.997 billion, representing an oversubscription of N76.997 billion was received, with bids ranging between 12.00% and 18.50%.

However, only N86.187 billion was allotted with the marginal rate being 15.00%. N90 billion was offered for the 14.55% FGN APR 2029 bond.

A subscription of N56.839 billion was received, representing an under-subscription of N33.161 billion, with bids ranging between 12.50% and 18.00%.

However, the total allotted amount was N21.939 billion with a marginal rate of 15.50%.

N90 billion was offered for the 14.70% FGN JUN 2033 bond. A subscription of N68.846 billion was recorded, representing an under-subscription of N21.154 billion, with bids ranging between 13.50% and 17.97%. The total allotted amount was N43.346 billion with a marginal rate of 16.00%.

N90 billion was offered for the 15.45% FGN JUN 2038 bond. A subscription of N311.875 billion was received, representing an oversubscription of N221.875 billion with bids ranging from 15.7% and 18.5%. The total allotted amount was N266.725 billion with the marginal rate being 16.50%.

The auction results display continued investors’ appetite for longer-tenured bonds in Nigeria due to higher yield rates, even as Nigeria is yet to turn the corner concerning inflation.

With a drop in 2024’s budget deficit to N9.18 trillion from 2023’s budget deficit of N11.34 trillion, it is expected that there will be a drop in the amount raised through FGN bonds.

For example, the N418.197 billion allotted in FGN bonds in January 2024 is a 36.9% year-on-year decline from the N662.617 billion raised in January 2023

Governor Babajide Sanwo-Olu announced this achievement via his official Twitter account on Tuesday evening.

The funds raised will play a vital role in driving infrastructure development, stimulating economic growth, creating employment opportunities, and enhancing the quality of life for residents of Lagos.

This successful bond issuance demonstrates the resilience of the city and the confidence that investors have in its ability to responsibly utilize the funds for development purposes.

The government of Lagos expresses gratitude to the investors for their belief in the immense potential of the city and assures them of its commitment to transparency and prudent financial decision-making, all aimed at building a better Lagos for future generations.

Governor Sanwo-Olu further emphasized that the investment will have a positive impact on both the short-term and long-term development of key sectors within Lagos state

He wrote: “We have raised N134.8 billion in long-tenure bonds, marking another record in accessing capital market funds. This investment will fuel key infrastructure projects in sectors such as education, electricity, roads, and agriculture.

“Today, we signed the transaction instruments for the first sets of allotment in the N1 trillion Debt and Hybrid Issuance Programme. This includes a 10-year tenure bond and a Shariah-compliant Sukuk.

“With the proceeds from the bond and Sukuk, we will be executing various projects pre-inspected by the Securities and Exchange Commission.

This includes overhauling 33 public schools in Ajegunle, road infrastructure on the Lekki-Epe corridor, drainage works, and more.

The bond issuing paperwork that ARM Securities supplied to investors indicates that Nigeria’s largest economy will raise to N100 billion under the current offer, which is Series I. The offer’s application period expires on May 12, 2023.

The Lagos State Government has stated that the funds raised from the offer will be utilized to fund important social and physical development projects throughout the state.

“Lagos State is among the 10 fastest-growing markets in Africa (and was ranked the 4th largest city in Africa in 2021) accounting for the location of more than 65% of Nigeria’s industrial capacity. The headquarters for most Nigerian Banks are in Lagos as well as top-tier companies and transnational corporations.

“The State is strategically positioned as a major trade port – with 50% of Nigeria’s port revenue being generated in Lagos from 3 lighter terminals and 2 seaports – and a first-choice destination for foreign investors,” ARM Securities stated in a note to investors.

The state was assigned an AA- long-term rating, translating to a stable outlook by Agusto & Co, and GCR respectively.

“This represents an upgrade from the previous A+ rating, given the State’s resilient financial condition, robust financial flexibility, suitable expenditure profile, and very strong cash-generating capacity to meet local currency obligations on time from Internally Generated Revenues (IGR). Lagos’ IGR is over 70% of the State’s total revenues. In 2021, the State generated total revenue of N771bn, including IGR of N573bn,” ARM Securities added.

The tenor of the current offer is ten (10) years just as its pricing ranges from 14.875 percent to 15.250 percent. The offer has a security term structure in the form of an Irrevocable Standing Payment Order (ISPO), and Consolidated Debt Service Account (CDSA) funded from the state’s internally generated revenue.

For interested investors, the minimum unit of sale is N10 million, and multiples of N1 million thereafter. The offer documents show it will be listed on the Nigerian Exchange Limited (NGX) and the FMDQ Securities Exchange Limited.

Interested investors should also note that redemption or repayment is through amortized principal repayment following a 24-month moratorium. The offer for subscription is using book build while the coupon basis is fixed rate and semi-annually, the offer documents show.

“Over the last 10 years, Lagos State’s spending on infrastructure development within the state has exceeded N3 trillion. The focus on infrastructure development is essential, fostering economic growth and boosting the state’s financial capacity, enabling it to attract further capital,” the offer documents stated.

The NGX said in its weekly report on exchange activity that the bonds include 436,012 units of 436,012,000.00 at a 10.032 percent interest rate and 643,204 units of 643,204,000.00 at an 11.023 percent interest rate.

The former bond has a two-year maturity date, while the latter has a three-year maturity date, with maturities in April 2025 and April 2026, respectively.

The Debt Management Office said the bonds are priced at N1,000 per unit, with a minimum subscription of N5,000, and subsequent subscriptions in multiples of N1,000, with a maximum subscription of N50,000,000.

The DMO reported 324 successful subscriptions for the two-year tenor bond and 280 for the three-year tenor bond as of Monday, April 17.

Every month, the FGN Savings Bond is issued in tenors of two and three years, with quarterly payments of coupons (interest) at a rate predetermined and published by the DMO.

The bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria, according to the debt office.

After successfully raising over N11.4 billion through its N100 billion Sukuk Issue Programme, the bank listed a N10 billion Mudarabah Sukuk issuance.

An Additional Tier 1 Capital Mudarabah Sukuk with loss-absorbency features is the first of its kind in Nigeria and is intended to help TAJ Bank improve its capital adequacy ratio and overall corporate business operations.

Both retail and institutional investors were interested in the issuance, which led to a subscription of 113.6. The oversubscription of this Issuance shows that Nigeria’s investment culture is still strong and that there is ongoing optimism about the country’s ability to achieve economic stability and recovery.

Alhaji Tanko Gwamna, Chairman of TAJBank, who was present at the closing gong ceremony honoring the listing of the Sukuk issuance on the Exchange floor together with other top bank officials, reaffirmed that the listing is the first of its kind on the trading floor and that it is non-interest bearing.

He pointed out that the capital market requires the listing of the Corporate Sukuk to provide liquidity and propel Nigeria’s economy forward.

TAJBank Boss disclosed that the financial institution is considering investing in the manufacturing and Agriculture sectors with raised funds from the Sukuk.

“Manufacturing sector is the only sector that can take most of the youth out of the street and keep them engaged. Also, we are funding agriculture production and its value chain from start to finish. These two sectors are where we wanted to fund the Sukuk issuance,” he said.

“The listing on the Exchange is for investors to trade in the Sukuk and diversify their investment,” he added.

According to him, “We are setting the trend and I’m sure a lot of corporates will come along. We are making more offerings because the market needs corporate Sukuk. It was a transparent exercise and people can trade with our Sukuk and it will offer more liquidity for economic growth.

He added that the financial institution very soon will be back in the capital market and raise more funds.

Speaking also, the Managing Director/CEO, TAJBank, Mr. Hamid Joda said the Sukuk listing aims to give Nigeria’s investors alternative means of investment.

He noted that “Millions of investors have been yearning for non-interest or Islamic instruments. We believe this is an opportunity for them to invest in such an instrument.

“The funds raised will be deployed into high-impact sectors that create jobs in Nigeria’s economy and in that way, it will have high-impact opportunities for millions of Nigerians.

“I believe with this move; we have inspired many other corporates in the financial space to come on board and issue Sukuk for greater development of our dear country.”

The DMO announced the bond auction, listing the first offer as a N90 billion February 2028 FGN bond with a 13.98 percent annual interest rate (10-year reopening).

The second is a N90 billion April 2032 FGN bond with an annual interest rate of 12.50 percent (10-year reopening).

There is also a N90 billion April 2037 FGN bond with a 16.24 percent annual interest rate (20-year reopening).

The fourth offer is an April 2049 FGN bond, also valued at N90 billion, at an interest rate of 14.80 percent per annum (30-year re-opening).

It announced that the auction date is February 13, while the settlement date is February 15.

According to the DMO, for the re-opening of previously issued bonds, 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.

“Interest is payable semi-annually, while bullet repayment (principal sum) is on the maturity date.

“FGN bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.

“They qualify as securities in which trustees can invest under the Trustee Investment Act.

“They also qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for funds among other investors.

“They are listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange,’’ the DMO said.

At the Ministerial Presentation of the 2023 Budget at the Ministry of Finance Headquarters in Abuja, Ahmed made this announcement.

She also revealed that the government’s contingent liabilities as a share of GDP fell from 2.75% in 2020 to 2.64% in 2021. By the end of 2022, it is anticipated to be in this region.

Dr. Ahmed said that the “total public debt as a percentage of GDP stood at 23.06% as of June 30, 2022, within the 55% threshold recommended by the International Monetary Fund (IMF)/World Bank (WB) as well as Nigeria’s self-imposed limit of 40% set in the MTDS 2020-2023, even after including the outstanding balance on CBN Ways & Means Advances”

She added that the Target Ratio under the MTDS 2020-2023 is 70:30 and that the Debt Management Office was expecting to achieve the target by end of 2023.

While responding to the question on the Ways and Means, the minister said, “The total Ways and Means today is 20 trillion and we have the approval to securitize.

The securitization will be over in a 40-year period with an interest rate of 9%. But over the years, we have been paying the interest component at the current rate that is charged on the Ways and Means.”

She added that the exposure to refinancing risk remained stable as a result of the strategy of issuance of long-dated securities in the domestic and international markets in addition to accessing long-term funds from multilateral and bilateral lenders.