FG to Issue N2.5 Trillion Domestic Bond in February

The Federal Government is hoping to raise N2.5 trillion fresh domestic debt in February in its effort to meet N9.18 trillion 2024 fiscal budget deficit.

On behalf of the FG, the Debt Management Office (DMO) is opening offer to sell a total N2.5 trillion FGN bonds to members of the investing public to raise the money this month.

The offers are split into N1.25 trillion at a 7-year tenure and N1.25 trillion for a 10year tenure.

This is according to a publication by the DMO. The subscription date is February 19, 2024 while the settlement date is 21st February 2024.

The maturity date for the 7year bond is February 2031 while that of the 10-year bond is February 2034.

According to the statement, the bonds are offered at a unit price of N1,000, with a minimum subscription requirement of N50,001,000 and subsequent increments in multiples of N1,000.

For this offer, the DMO stated that interest will be paid semi-annually, and successful bidders will get any accrued interest on the previously opened offer.

The DMO stated, “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 any accrued interest on the instrument.”

President Bola Tinubu had said the deficit will be financed by new borrowings totalling N7.83 trillion, N298.49 billion from Privatisation Proceeds and N1.05 trillion  drawdown on multilateral and bilateral loans secured for specific development projects.”

He also emphasized the need to maintain the January-December implementation cycle saying “Our goal is to ensure that the Appropriation Act comes into effect on January 1, 2024,”