Breaking News: The Federal Government of Nigeria has commenced issuance of a package of bond worth $500 million in total. The bond which will have a five-year term before maturity will be made available to both local and foreign investors. The issuance exercise will be overseen by the Debt Management Office (DMO).
The bond will mature in 2029 and will carry a 9.7% interest rate per annum.
The auctioning exercise for the bond will remain open until August 30 2024.
What is a bond
In finance, a bond is a type of security (similar to a company’s shares) under which the issuer owes the holder a debt, and is obliged (depending on the terms) to pay money to the creditor
Subscribing for the bond
September 6 2024 is the set date when subscribers will be fully confirmed and dividends on the bond will start accruing.
The minimum amount to subscribe for the bond is $10,000. However after making a $10,000 minimum subscription, investors can increase their subscription by a minimum amount of $1000 or more.
Dividends on the bond will mature in five years time and payments will be made through a bullet system ensuring that investors securely retrieve their capital along with the accrued interest once the time is due.
Minister of Finance Wale Edun in a statement made available to 9AM News Nigeria said “This bond issuance is more than just a financial instrument; it is a strategic move to channel funds into sectors that will catalyse economic growth. We aim to mobilise resources effectively and channel them into the country’s development needs. This initiative aligns with our broader strategy to utilise both domestic and foreign capital for infrastructure and other critical sectors.”
In another statement made available to Ogasabi of 9AM News Nigeria, Gbadebo Adenrele who is managing director of UnitedCapital, said, “One of the key aspects of this bond issuance is that it will be listed on platforms such as the Nigerian Exchange and FMDQ, making it accessible to a variety of investors. The principal will be repaid after five years, with interest payments made every six months. This structured repayment schedule is designed to provide confidence to investors.”
