FG bars cash payment for $500m domestic bond

The Debt Management Office of the Federal Government has begun accepting bids for its $500 million dollar-denominated domestic bond.

It was issued with a five-year tenor and a 9.75 percent annual interest rate with a maturity date of 2029.

This was due to the fact that it prohibited potential investors from paying for their investments with cash. 

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“Payment shall only be made through the banking system and electronic transfers into the designated accounts. No cash deposits will be accepted under this transaction, except where such cash deposits have been made into the domiciliary account for not less than 30 days before the date of this offer,” the statement posted on its website stated on Monday.

Wale Edun, the Coordinating Minister of the Economy and Minister of Finance, declared last week that the $500 million Series 1 domestic dollar bond auction would take place today.

This dollar bond, which offers full principal repayment at the end of the five-year period and bullet payoff at maturity in US dollars, is the first of its kind in the nation.

According to the announcement, eligible investors included Nigerian nationals, Nigerians with savings overseas, Nigerians living abroad, and Qualified Institutional Investors.

With August 19 as the opening date, August 30 as the closing date, and September 6, 2024 as the settlement date, investors will have more than enough time to participate in this offering.

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The bond has a five-year investment term and semi-annual coupon payments.

The minimum subscription amount for investors is $10,000 (10 units), with units available for purchase at a minimum of $1,000 apiece. One can make additional investments in multiples of $1,000. 

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