The bonds are offered at N1,000 per unit with a minimum subscription of N50 million and in multiples of N1,000 after that. Successful bidders will pay the price corresponding to the yield-to-maturity bid that clears the volume being auctioned plus any accrued interest on the instrument.
The interest payment is done semi-annually, while bullet repayment is done on the maturity date.
The DMO further stated that the bonds were charged upon the general assets of Nigeria and qualify as securities in which trustees can invest under the Trustee Investment Act. They also qualify as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds and other investors. Additionally, the bonds are listed on the Nigerian Stock Exchange Limited and FMDQ OTC Securities Exchange.
The DMO’s offer is part of the federal government's efforts to raise funds to finance various projects in the 2021 budget. It is also expected to help boost investors' confidence in the Nigerian economy as the government makes efforts to diversify its revenue sources.
While the bonds offer attractive interest rates, some analysts have raised concerns about the government's ability to pay off its debts, given the country's mounting debt profile. As of September 2021, Nigeria's total public debt stood at N33.11 trillion, with external debt accounting for about 32.5% of the total. However, the government has repeatedly assured investors that it is committed to debt sustainability and fiscal discipline.
Investors are expected to show significant interest in the bonds, given the high-interest rates and the fact that they are backed by the federal government's full faith and credit. The offer is open to all categories of investors, including individuals, institutional investors, and foreign investors.
The DMO has been instrumental in managing Nigeria's debt and ensuring that the country's borrowing is sustainable. It has also been actively involved in the development of the domestic debt market, which is expected to deepen with the issuance of more bonds. The DMO's activities have helped to enhance transparency in the management of Nigeria's debt, thereby boosting investors' confidence.