The Federal Government of Nigeria has announced the offering of a $500 million FGN bond for subscription, available to interested investors. According to a statement from the Debt Management Office (DMO) on Monday, the bond is a five-year domestic FGN dollar bond, maturing in 2029, with an interest rate of 9.75% per annum.
The bond offer opened on August 19 and will close on August 30, with the settlement date set for September 6. The bond is offered at $1,000 per unit, with a minimum subscription of $10,000 (10 units) and increments of $1,000 thereafter.
The DMO outlined that eligible investors include Nigerian residents, Nigerians with savings abroad, the Nigerian diaspora, and qualified institutional investors. Payments can only be made through the banking system via electronic transfers, with no cash deposits accepted unless held in a domiciliary account for at least 30 days before the offer.
The dollar-denominated FGN bond is backed by the full faith and credit of the Federal Government of Nigeria and has been granted liquid asset status by the Central Bank of Nigeria (CBN). It also qualifies as a security under the Trustee Investment Act and the Pension Act, offering tax exemptions under the Company Income Tax Act and Personal Income Tax Act.
The bond will be listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange Limited. This initiative, announced by the Federal Government through the DMO, aims to boost dollar liquidity. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, emphasized the importance of dollar funding for stabilizing the exchange rate.
