DMO reopens four FGN bonds at N360bn targeted at budget financing

THE Debt Management Office (DMO) said it has reopened for subscription four FGN bonds valued at N360 billion, as the Federal government intensifies borrowing to bridge the budget deficit.

The DMO, which disclosed this in a circular on Wednesday, April 12, added that the auction date is April 17, and settlement date, April 19.

According to the debt office, the first offer is a February 2028 FGN Bond valued at N90 billion, at interest rate of 13.98 per cent per annum (10-year re-opening).

The second offer is an April 2032 FGN Bond, valued at N90 billion, with an interest rate of 12.50 per cent per annum (10-year re-opening).

The third offer is a January 2042 FGN Bond valued at N90 billion, with an interest rate of 13.00 per cent per annum (20-year re-opening).

And the fourth offer is the March 2042 FGN Bond, also valued at N90 billion, at an interest rate of 12.98 per cent per annum (30-year re-opening).

The debt office raises bonds to finance Federal government’s budget deficit, as well as to refinance its maturing obligations during a fiscal year, The ICIR can report.

In January and February, the DMO raised a total of N2.129 trillion from issuances of FGN bonds, Nigerian treasury bills, and FGN savings bonds.

Of the sum, N1 trillion was deployed for deficit financing, which represented 14.2 per cent of the total requirements of the N7,043 trillion deficit funding for this year.

FGN Bonds are debt securities (liabilities) issued by the Debt Office for and on behalf of the federal government, with obligation to pay the bond holder the principal and agreed interest as and when due.



    In re-opening the bonds, the DMO said, “For re-openings 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 payment is made on maturity.”

    Listed on the Nigerian Stock Exchange Limited and FMDQ Securities Exchange Limited, the bonds qualify as securities in which trustees could invest under the Trustee Investment Act.

    “They qualify as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds among other investors,” DMO added.

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