Barring any last-minute change, the Debt Management Office (DMO) will tomorrow auction N150 billion Federal Government bonds to investors. DMO announced this recently in a circular on its website.
A bond is a fixed income instrument that represents a loan made by an investor to a borrower — typically corporate or government. According to the circular, the bond issuance will be in two tranches valued at N75 billion each.
The first tranche is the 10-year, 12.5 per cent FGN Jan 2026 re-opening bond, while the second is the 20-year, 13 per cent FGN 2042 reopening bond. It said the bonds sell for N1,000 per unit, subject to a minimum subscription of N50,001,000 and in multiples of N1,000 afterwards.
The DMO stated that the settlement date of the bond issuance is February 18, 2022. For re-openings of previously issued bonds (where the coupon is already set), the agency specified that successful bidders are required to pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument.
It said interest on the bonds would be payable semi-annually while bullet payments would be made on maturity date.[The Sun]
