As CBN auctions N700bn
NIGERIA’S financial landscape is set for a significant shake-up this week as N1.18 trillion worth of Nigerian Treasury Bills are scheduled to mature.
This development comes on the heels of the Central Bank of Nigeria’s (CBN’s) decision to auction N700 billion worth of Treasury Bills at the next Primary Market Auction (PMA), distributed across standard maturities of 91 days, 182 days, and 364 days (N80 billion, N120 billion, and N500 billion, respectively)
As investors await the outcome of the auction, market analysts will be closely watching the impact of the maturing Treasury Bills on the overall liquidity of the financial system.
However, investor sentiment is expected to remain positive, with a gradual easing in average market yields.
Similarly, the Debt Management Office (DMO), on behalf of the Federal Government of Nigeria (FGN), has announced the reopening of two Federal Government bonds, totalling N300 billion, for subscription by auction. The issuance is part of the government’s domestic borrowing strategy to finance budget deficits and support infrastructure development.
The auction is scheduled for March 24, with a settlement date of today March 26. The bonds being offered are: N200 billion – 19.30 percent FGN APR 2029 (5-Year Reopening); N100 billion – 19.89 percent FGN MAY 2033 (nine-Year Reopening)
Both bonds are reopenings of previously issued instruments, meaning their coupon rates remain fixed. Investors will pay a price based on the yield-to-maturity that clears the auction volume, plus any accrued interest.
The bonds are priced at N1,000 per unit, with a minimum subscription of N50,001,000 and increments of N1,000 thereafter.
Interest Payment: Interest is payable semi-annually, providing investors with a steady income stream.
The bonds will be repaid in full upon maturity through bullet repayment and they qualify as securities under the Trustee Investment Act and are recognized as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA).
This makes them tax-exempt for pension funds and other eligible investors. Additionally, they are listed on the Nigerian Exchange Limited (NGX) and FMDQ OTC Securities Exchange, ensuring liquidity and transparency.
According to the DMO, the bonds offer competitive interest rates—19.30 percent for the 5-year bond and 19.89 percent for the 9-year bond—compared to other fixed-income instruments in the market.
Investors, including pension funds and institutional buyers, benefit from tax-free earnings and since the bonds are listed on NGX and FMDQ, investors can buy and sell them in the secondary market, ensuring flexibility.
Backed by the full faith and credit of the Federal Government of Nigeria, the bonds are considered low-risk investments.
The auction will take place on March 24, 2025, and successful bidders must settle their purchases by March 26, 2025. Investors are encouraged to place bids through authorized primary dealers, who act as intermediaries between the DMO and the investing public.
This bond issuance aligns with the Federal Government’s strategy to manage its national debt effectively while providing lucrative investment opportunities for domestic investors.
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