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DMO set to auction N150 billion in FGN Bonds to investors

Babajide Okeowo

The Federal government of Nigeria, FG is set to offer a fresh FGN Bonds valued at N150 billion for subscription through the Debt Management Office (DMO) this week.

 According to the offer circular released to the public, the DMO disclosed that the bonds to be offered would include a 5-year N50 billion FGN APR 2023 bond at 12.75%, a 10-year N50 billion FGN APR 2029 bond at 14.55% and a 30-year N50 billion FGN APR 2049 bond at 14.80%. The settlement date for the subscription is scheduled for Friday, November 22, 2019.

 The DMO disclosed that the FGN bonds, which qualify as securities, which trustees can invest under the Trustee Investment Act, also qualify as liquid assets for liquidity ratio calculation for banks. The bonds are to be listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange.

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 Investments in FGN Bonds as stated in the circular by DMO qualify for tax exemption to pension funds and other investors.

“Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors,” the DMO offer Circular stated.

 The bonds are to be offered at N1, 000 per unit, subject to a minimum subscription of N50, 001,000, and in multiples of N1, 000, thereafter. The bonds’ interests are to be semi-annually, and bullet repayments made on the maturity date. The DMO reserves the right to alter the amount allotted in response to market conditions.