The Debt Management Office (DMO) is opening offer to sell a total N2.5 trillion FGN savings bonds to members of the public this month. The offers are split into N1.25 trillion at a 7-year tenure and N1.25 trillion for a 10year tenure.
This is according to a publication by the DMO. The subscription date is February 19, 2024 while the settlement date is 21st February 2024.
The maturity date for the 7year bond is February 2031 while that of the 10-year bond is February 2034.
Unit of sale
According to the statement, the bonds are offered at a unit price of N1,000, with a minimum subscription requirement of N50,001,000 and subsequent increments in multiples of N1,000.
Interest rate
For this offer, the DMO stated that interest will be paid semi-annually, and successful bidders will get any accrued interest on the previously opened offer.
- It stated, “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.”
FG’s debt
- FGN savings bonds are part of the domestic borrowing plan of the federal government. In 2023, the federal government raised around N7.04 trillion in domestic borrowing through the DMO. Of that figure, around N5.49 trillion was from the FGN bonds which was used to finance the 2023 budget.
- In 2024, the federal government projects new borrowings to reach N7.83 trillion. Already, President Tinubu had already written to the National Assembly to approve around $8.69 billion and €100 million as part of the external borrowing plan for 2022 to 2024.
About FGN bonds
- The FGN bonds meet the criteria outlined in the Trustee Investment Act, allowing trustees to invest in them. Additionally, they qualify as Government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA), ensuring they are tax-exempt for Pension Funds and other investors.
