FG Eyes N70b From Treasury Bonds

The Federal Government intends to issue N70 billion ($350 million) worth of Treasury bonds with maturities ranging between five and 20 years at an auction on August 12, the Debt Management Office (DMO) said.

The DMO said it will issue a five-year bond to raise N40 billion and 20-year note to raise N30 billion.

The papers are re-openings of previous issues. Results of the auction are expected on August 14.

On interest rate, DMO explained that for re-openings of  previously issued bonds,  (where the coupon is  already set), successful  bidders will pay a price  corresponding to the yield- to-maturity bid that clears the volume being auctioned, plus accrued interest from the original issue date.

While the treasury bonds qualify as securities in which trustees can invest under the Trustee Investment Act, it also qualifies as Government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for Tax Exemption for Pension Funds amongst other investors.

Besides, it is listed on the Nigerian Stock Exchange and all Federal Government Bonds qualify as liquid assets for liquidity ratio calculation for banks.

The DMO added that FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of the country.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s