N360bn Savings Bond: What You Need to Know and How to Apply

The Debt Management Office (DMO) has announced a new offer for subscription of a N360bn savings bond to attract investors and raise funds for the Federal Government of Nigeria.

The DMO, in a statement yesterday, said it is accepting applications for the bond by auction and that interested investors can apply for units of N1,000 each, subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.

The DMO had previously issued three N360 bonds in January, March and May this year.

The new offer consists of four bonds with different interest rates and tenors. They are:

N90bn with 13.98 per cent interest and 10 years reopening

N90bn with 14.98 per cent interest and 15 years reopening

N90bn with 15.98 per cent interest and 20 years reopening

N90bn with 16.98 per cent interest and 30 years reopening

The DMO said the auction date is June 19, 2023 while the settlement date is June 21, 2023. The interest payment will be made semi-annually.

The DMO explained that 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.

It added that the bond qualifies as securities in which trustees can invest under the Trustee Investment Act and as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds and other investors.

It also said that the bond is listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange and qualifies as a liquid asset for liquidity ratio calculation for banks.

The DMO assured investors that the bond is backed by the full faith and credit of the Federal Government of Nigeria and is charged upon the general assets of Nigeria. It also said that there will be bullet repayment on the maturity date.

It urged interested investors to contact its major dealers for more information.

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