FG Picks 13 Banks to Sell First N20bn 30-Year Bond to Investors

A total of 13 financial institutions will sell the first 30-year Naira bond to be issued by the Nigerian government next week, Business Post is reporting.

A circular released by the Debt Management Office (DMO) on Tuesday disclosed that N20 billion worth of the debt instrument would be sold to investors precisely on Wednesday, April 24, 2019.

During the exercise, the debt office, which is issuing the notes on behalf of the Federal Government of Nigeria (FGN), will offer two other maturities to investors.

According to the circular from the DMO, N40 billion worth of the 5-year bond maturing in April 2023 will be issued at 12.75 percent and would be re-opening.

In addition to this, the debt office will issue new 10-year paper valued at N40 billion and would be maturing in April 2029.

Business Post reports that investors willing to subscribe to the bonds will have to approach the following 13 banks; Access Bank Plc, First Bank of Nigeria Ltd, Standard Chartered Bank Nigeria Ltd, Citibank Nigeria Ltd, First City Monument Bank Plc, United Bank for Africa Plc, Coronation Merchant Bank Ltd, FSDH Merchant Bank Ltd, Zenith Bank Plc, Ecobank Nigeria Ltd, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Ltd and Stanbic IBTC Bank Plc.

Intending investors will be required to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

The debt office stated that 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, with the interest paid semi-annually.

It is important to state that FGN Bonds are backed by the full faith and credit of the Nigerian government and are charged upon the general assets of Nigeria.

The bonds qualify as securities in which trustees can invest under the Trustee Investment Act.2.

After the sale, the notes would be listed both on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange.

The debt office disclosed in the circular on Tuesday that all FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks.

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