The Federal Government of Nigeria (FGN) through the Debt Management Office (DMO) is seeking to raise the sum of N60 billion in its November Bond Auction. This figure is less than the N90 billion bond it offered in October 2024.
November Bond Auction Details
November’s bond auction is slated for November 18, 2024, with the settlement date slated for November 20, 2024.
The latest bond offer includes a 19.30% interest rate for bonds to be reopened on April 29 after five years while bonds with a seven-year reopening date elapsing in February 2031 carry an 18.50% interest rate.
The bonds are for sale at N1,000 per unit subject to a minimum subscription of N50,001,ooo and multiples of N1,000 thereafter.
Why the FGN is Issuing November’s Bonds
The latest bond offer by the Federal Government is part of the FGN’s planned borrowing strategy outlined in its annual budget. The bond schedule is often set to align with the country’s broader fiscal and economic policies, providing liquidity and investment opportunities for institutional and individual investors.
This bond issuance is part of the FGN’s plans to raise the necessary funds needed to finance its year end expenditure and ensure there is a balance when the next fiscal year begins in January, 2025.
Status of the FGN November Bond
The November bond issued by the DMO on behalf of the FGN qualifies as a security in which trustees can invest under the Trustee Investment Act.
The bond qualifies as Government Securities within the confines of the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA) for tax exemption for investors. The FGN bonds also qualify as liquid assets for liquidity calculation ratio for banks.
Why Individuals and Organizations Should Tap Into The Bond Offer
FGN Bonds are worthwhile investments for individuals and organizations because the coupon/interest income from FGN Bonds are tax-free and can be used as collateral for short-term borrowings from commercial banks.
The bonds also carry guaranteed returns in addition to fixed and regular income in form of coupons as well as the expected interest locked against fluctuations. This makes investment in FGN bonds a worthwhile investment.
