The Federal Government has opened subscription offer for its December bond by reopening the APR-2023, APR-2029 and APR-2049 bonds, offering investors N50bn each across each tenor.
The Debt Management Office said in a notice on Wednesday that it was authorised to receive applications for subscription on behalf of the Federal Government.
It said the N150bn bonds consisted of a re-opening of N50bn five-year bond at a rate of 12.75 per cent, N50bn 10-year bond at the rate of 14.55 per cent and N5bn 30-year bond at the rate of 14.80 per cent.
For re-opening of previously issued bonds (where the coupon is already set), successful bidders usually pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument.
The circular said the bonds would be auctioned on December 18, 2019, and would be settled on December 20.
It added that the interest on the bonds would be payable semi-annually while a bullet repayment of the redemption would be made on the maturity date.
The circular read in part, “The bonds are offered at N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.
“They qualify as securities in which trustees can invest under the Trustee Investment Act as they are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.
“The bonds also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors. They are listed on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange.”
The DMO said the bonds qualified as liquid assets for liquidity ratio calculation for banks.
It said the accredited dealers for the transaction were Access Bank Plc, First Bank of Nigeria Limited, Standard Chartered Bank Nigeria Limited, Citibank Nigeria Limited, First City Monument Bank Plc, United Bank for Africa Plc, Coronation Merchant Bank Limited, FSDH Merchant Bank Limited, Zenith Bank Plc, Ecobank Nigeria Limited, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Limited and Stanbic IBTC Bank Plc.
The DMO, in its December savings bond allotment result, said it allotted a total of N1.02bn to investors.
It said the total amount allotted on the two-year savings bond was N222.73m at 9.091 per cent, of which 124 total successful subscriptions were recorded.
A total of 290 successful subscriptions were recorded on the three year savings bond, which was allotted at a coupon rate of 10.091 per cent on a total allotment of N797.74m.
The DMO said the coupon payments would be made on March 11, June 11, September 11 and December 11, 2020.