Stop rates to rise on N150bn FGN Bond auctions September 22

THERE are expectations that stop rates will rise marginally, mirroring the hike in the money market rate for 364-day bill to 7.20 per cent three weeks ago.

This is just as Bonds worth N150 billion would be auctioned by the Debt Management Office (DMO) on Wednesday, September 22, 2021, a notice from the agency has disclosed.

The debt instrument would be offered to investors in three maturities, with the settlement date fixed for Friday, September 24, 2021, the disclosure added.

The DMO further said the three tenors are re-opening and 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.

Details of the proposed exercise showed that N50 billion worth of 10-year note tagged 13.98 per cent FGN FEB 2028, N50 billion worth of 20-year note marked 12.40 per cent FGN MAR 2036 and N50 billion worth of 30-year noted tagged 12.98 per cent FGN MAR 2050 would be put up for sale next week via the primary market.

Interested investors have been advised to reach out to the under listed primary dealer market makers (PDMMs); Access Bank, First Bank of Nigeria, Standard Chartered Bank Nigeria, Citibank Nigeria.

First City Monument Bank, United Bank for Africa, Coronation Merchant Bank, FSDH Merchant Bank, Zenith Bank, Ecobank Nigeria, Guaranty Trust Bank, FBNQuest Merchant Bank and Stanbic IBTC Bank.

They would be expected to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

The FGN bond was created mainly for high-net-worth individuals and institutional investors as a source of investment and borrowing channel for the government to fund budget deficits.

The paper is tax-free and can be sold before maturity via the secondary market because it would be listed on the Nigerian Exchange (NGX) Limited and the FMDQ Securities Exchange.

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