DMO in the statement announcing the new bond said one is a two-year FGN Savings Bond due in Jan. 11, 2025, at the interest rate of 9.600 percent per annum.
President Muhammadu Buhari's administration, that is drawing the curtains by May, has announced another round of borrowings through bonds which the next government will have to inherit from him.
The new borrowing plan for 2023 was announced by the Debt Management Office (DMO), in a statement released on Tuesday, calling for subscription for the two Federal Government of Nigeria (FGN) Savings Bonds that have maturity dates in 2025 and 2026 respectively.
DMO in the statement announcing the new bond said one is a two-year FGN Savings Bond due in Jan. 11, 2025, at the interest rate of 9.600 percent per annum.
The other is a three-year FGN Savings Bond due in Jan 11, 2026, at the interest rate of 10.600 percent per annum.
According to the details of the bonds issuance, opening date would start from Tuesday, Jan. 3, while the closing date would be Friday, Jan. 6, 2023 and settlement date, Jan. 11, while coupon payment dates would be April 11, July 11, Oct. 11 and Jan. 11.
The statement partly read, “They are offered at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
“Interest is payable quarterly while bullet repayment (principal sum) is on maturity."
The debt management office further stated that the FGN Savings Bonds qualified as securities in which trustees could invest under the Trustee Investment Act.
It added, “They also qualify as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds.
“They are listed on the Nigerian Stock Exchange Limited and qualify as liquid asset for liquidity ratio calculation for banks."
It noted that the bonds were backed by the full faith and credit of the FGN and charged upon the general assets of the country.
Meanwhile, as at December 22, 2022 Nigeria’s domestic debt stood at N22.57tn.
President had also in December last year sought for the approval of the National Assembly for N819.54bn supplementary budget, which it planned to finance through domestic borrowing.
Buhari had in the proposal forwarded to the National Assembly for approval, stated that N819.5bn supplementary budget for the 2022 fiscal year was to fix various infrastructure destroyed by floods across the various states in the country a few months ago.
The supplementary budget as explained by the President in a letter read in plenary by the President of the Senate, Ahmad Lawan, is meant for the capital expenditure component of the 2022 budget with an attendant increase of deficit to N8.17tn.