The Debt Management Office (DMO) has revealed plans to issue bonds worth N450 billion in its upcoming auction scheduled for May 13, 2024. This move is part of the government’s monthly bond auction aimed at fulfilling national financial requirements and offering lucrative investment opportunities for both institutional and retail investors.
The auction will feature three distinct bond series, each providing investors with various maturity options and competitive yields. The first series involves a reopening of the five-year 19.30% FGN APR 2029 bond, initially issued in April 2024. This reopening aims to raise N150 billion and offers investors a fixed coupon rate of 19.30%, ensuring stable returns over the maturity period.
In the second series, a reopening of the seven-year 18.50% FGN FEB 2031 bond is planned to raise another N150 billion. With a coupon rate of 18.50%, this bond presents investors with an opportunity for steady interest income over the long term, contributing to national development.
Additionally, the auction will introduce a new nine-year bond, FGN MAY 2033, with a target of raising N150 billion. The coupon rate for this bond will be determined based on the yield achieved at auction, making it an attractive option for investors seeking longer-term investment opportunities and potentially significant yields.
The auction is scheduled for May 13, 2024, with a settlement date of May 15, 2024. Each unit will be priced at N1,000, with a minimum subscription requirement of N50,001,000 and subsequent multiples of N1,000. Interest payments for all three bonds will be made semi-annually, providing investors with regular income throughout the investment period.
These bonds offer several benefits to investors, including tax exemptions for pension funds and other qualified investors, recognition as liquid assets for bank liquidity ratio calculations, and listing on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. Moreover, all bonds are backed by the full faith and credit of the Federal Government of Nigeria, ensuring their security and charging them against Nigeria’s general assets.
The DMO’s announcement comes after the successful April 2024 FGN bond auction, where the government raised N626.813 billion, showcasing robust investor interest and confidence in Nigeria’s credit. With the May auction, the government aims to continue meeting its financial obligations while providing attractive investment avenues for both local and international investors.
