BY MYKE UZENDU, ABUJA
As part of efforts to curb inflation in the system and stabilize the exchange rate, The Federal Government has offered a bond valued at 500 million dollars for subscription to interested investors.
The Debt Management Office (DMO) in a statement yesterday said that it is a five-year domestic FGN dollar bond due in 2029, at an interest rate of 9.75 per cent per annum.
DMO stated that the bond opened on Monday, Aug. 19, while closing date is Aug. 30 and settlement date, Sept. 6.
“It is offered at 1,000 dollars per unit subject to a minimum subscription of 10,000 dollars (10 units), and in multiples of 1,000 dollars thereafter.
“Coupon payment is semi-annually, while bullet repayment (principal sum) is on maturity date.,” DMO said.
It listed eligible investors as Nigerian residents, Nigerians with savings abroad, Nigerian in diaspora, and qualified institutional investors.
“Payment shall only be made through the banking system and electronic transfers into the designated accounts.
“No cash deposits will be accepted under this transition, except where such cash deposits have been made into the domiciliary accounts for not less than 30 days prior to the date of offer,” it said.
The DMO said that the dollar-denominated FGN bond was backed by the full faith and credit of the Federal Government of Nigeria, and granted liquid asset status by the Central Bank of Nigeria. (CBN).
“It qualifies as securities in which trustees can invest under the Trustee Investment Act.
“Qualifies as securities in which the Pension Fund Administrators can invest under the Pension Act.
“Qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors,” it said.
It said that the dollar-denominated FGN bond would be listed in the Nigerian Exchange Limited and FMDQ OTC Securities Exchange Limited.
Also commenting on the offer, The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said that dollar funding was critical for the exchange rate to stabilise.