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FG to raise N73bn through bonds

By on October 15, 2014

The Federal Government has issued for subscription three set of re-opening bonds in a move to raise up to N73.6bn, according to a statement by the Debt Management Office.

The DMO said it would raise N18.61bn through the 13.05 per cent FGN August 2016 (three-year bond), N30bn through the 14.20 per cent FGN March 2024 (10-year bond), and N25bn through the 12.1493 per cent FGN July 2034 (20-year bond.

The Central Bank of Nigeria is authorised to receive applications for the bonds, which would be auctioned on Wednesday, October 15, 2014 and settled on October 17, according to the DMO. The three bond offers are re-openings.

“For re-openings of previously issued bonds, where coupon is already set, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument,” the offer document said.

The three-year bond has a maturity period of one year and 10 months, the 10- year bond has a maturity period of nine years and five months, while the 20-year bond has a maturity of 19 years nine months.

The DMO, which reserves the right to alter the amount allotted in response to market conditions, added that an additional sum of N10.330bn (14.20 per cent FGN Mar 2024) would be allotted as non-competitive bid.

The debt office has also released the auction result for the September bonds auction, which was the re-opening of the 13.05 per cent FGN August 2016, 14.20 per cent March 2024 and 12.1493 per cent FGN July 2034.

According to the DMO, successful bids for the 13.05 per cent FGN August 2016, the 14.20 per cent FGN March 2024, and 12.1493 per cent FGN July 2034 were allotted at the marginal rates of 11.4900 per cent, 12.2320 per cent and 12.2990 per cent, respectively.

It, however, said that the original coupon rate of 13.05 per cent for the 13.05 per cent FGN Aug 2016, 14.20 per cent for the 14.20 per cent FGN Mar 2024 and 12.1493 per cent for the 12.1493 per cent FGN Jul 2034 would be maintained.

 

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