The Debt Management Office (DMO) of Nigeria has announced the commencement of the subscription process for two-year and three-year Federal Government of Nigeria bonds for the month of October, offering an attractive interest rate of up to 12%. This announcement was made via a statement on the DMO’s official website and is expected to draw significant interest from investors.
The subscription period for these government bonds is set to span four days, running from October 3rd to October 6th, 2023. These bonds, with maturity dates set for October 11, 2025, are part of the Nigerian government’s efforts to finance various developmental projects and initiatives.
The DMO, in its official statement, highlighted the legal framework governing these bond offerings, stating, “Under the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004, DEBT MANAGEMENT OFFICE on behalf of the FEDERAL GOVERNMENT OF NIGERIA Offers for Subscription and is authorized to receive applications for the Federal Government of Nigeria saving bonds.”
Investors have the option to choose between two-year bonds, offering an interest rate of 11.074% per annum, or three-year bonds, which come with an attractive interest rate of 12.074% per annum. The settlement date for both bond offerings is set for October 11, 2023, with coupon payments scheduled for January 11, April 11, July 11, and October 11. These bonds will accrue interest payments every quarter, providing investors with a regular income stream.
The DMO has outlined the units of subscription, stating that investors can subscribe in units of N1,000, subject to a minimum subscription of N5,000, and subsequent multiples of N1,000, with a maximum subscription limit of N50,000,000. This flexibility in unit sizes allows a wide range of investors to participate in these offerings.
To participate in the subscription process, interested investors are encouraged to contact stock brokerage firms listed as authorized agents by the Debt Management Office (DMO). Additionally, these bonds will be traded on the Nigerian Exchange Group (NGX), providing liquidity and ease of trading for investors.
One crucial aspect to note is that Federal Government of Nigeria (FGN) bonds are fully backed by the federal government, which adds a significant level of security and trust for investors. This assurance from the government makes these bonds an attractive investment option for those seeking a safe and competitive return on their investments.
The subscription for the two-year and three-year Federal Government bonds is set to begin on October 3rd, giving investors a limited window to capitalize on the favorable interest rates offered by these securities. With the backing of the Nigerian government and the potential for steady returns, these bonds are expected to garner substantial attention from both retail and institutional investors.
As Nigeria continues to explore various avenues to raise capital for its development projects, the Federal Government bonds present an opportunity for investors to support the country’s growth while also benefiting from competitive interest rates.