The Debt Management Office (DMO) is gearing up to raise an impressive N450 billion in its upcoming April bond auction, scheduled for April 15. This ambitious target aligns with the agency’s broader plan to mobilize up to N1.8 trillion through Federal Government of Nigeria (FGN) bonds in the second quarter (Q2) of 2024.
Offering Details
In this auction, the DMO is offering N150 billion for the new FGN APR 2029 five-year bond. Additionally, N150 billion is allocated for the reopened FFBN FEB 2031 17-year bond, and another N150 billion for the FGN FEB 2034 10-year bond. The auction is set to take place on April 15, with the settlement date confirmed for April 17, 2024.
About FGN Bonds
FGN bonds are a cornerstone of Nigeria’s investment landscape, auctioned monthly by the DMO and paying interest semi-annually. With a minimum subscription of N50,000,001 and subsequent multiples of N1,000, these bonds are recognized as crucial investment instruments for trustees under the Trustee Investment Act. Furthermore, they enjoy tax exemption benefits for pension funds due to their classification as government securities, as mandated by the guidelines in the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA).
Key Takeaways
In Q1 2024, the DMO raised an impressive N2.39 trillion through FGN bonds, with the largest issuance occurring in February. Notably, issuance volumes reached N418.2 billion in January, soared to N1.49 trillion in February, and peaked at N475.7 billion in March, with interest rates hitting remarkable heights, including 20.45% on the 10-year bond.