The Federal Government of Nigeria has kicked off the last quarter of 2023 with the floating of savings bond and Sukuk offers, the Debt Management Office (DMO) announced this week.

Application for the savings bond offer opened on Tuesday 3 October 2023 and will close on Friday 6 October 2023.

Savings bonds and Sukuk are some of the instruments the federal and state governments have used to augment their finances amidst revenue shortfall.

As of 30 June 2023, Nigeria’s total domestic debt amounted to N48.32 trillion. According to the DMO, the breakdown showed that FGN Bonds accounted for the largest chunk of the domestic debt. With a total of N41.97 trillion, FGN Bonds accounted for 86.87 percent of Nigeria’s total domestic debt stock as of the reference date.

Nigerian Treasury Bills, which at N4.72 trillion, accounted for 9.77 percent of the nation’s domestic debt stock, ranked second in terms of importance as of half year 2023.

By having 1.61 percent weight, or N780.04 billion, promissory notes are the third most used financing instrument by the federal and sub national governments in terms of raising domestic capital. Sukuk ranked fourth, having a total amount of N742.56 billion, representing 1.54 percent of the nation’s total domestic debt stock.

The Nigerian Treasury Bonds, FGN Savings Bonds and Green Bonds accounted for the rest of the nation’s domestic debt composition.

The offer document shows that the savings bond comes with two options- 2 years and three years, tenors respectively. The 2-year savings bond due 11 October 2025 has a coupon rate of 11.074 percent per annum while the 3-year savings bond due 11 October 2026 has a coupon rate of 12.074 percent per annum.

The minimum subscription is N5,000 and in multiples of N1,000 with a maximum of N50 million for the savings bond offer.

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“The FGN Savings Bond will be listed and is traded on the Nigerian Stock Exchange,” FG states in the offer document.

The Sukuk offer also opened on 3 October and information on the subscription form shows that the federal government plans to raise a total of N150 billion through this offer. The Sukuk offer is part of the domestic financing plans for the remaining part of this year.

The 10-year Sukuk offer due October 2033 has a rental rate of 15.75 percent per annum. Greenwich Merchant Bank, Stanbic IBTC Capital and Vetiva Capital Management Limited act as the issuing houses.

The offer document shows that the minimum subscription is N10,000 and in multiples of N1,000.

Jaiz Bank, Lotus Bank, Stanbic IBTC Bank, Sterling Bank and TAJ Bank are the receiving banks for the offer.

Meanwhile, the Debt Management Office (DMO) has released the bonds issuance calendar for the fourth quarter of 2023. The auction dates are October 16, November 13, and December 11 2023.

On October 16, the FGN will float a re-opening bond 14.55% FGN APR 2029 having a maturity of five years and six months, while the amount to be raised ranges from N80 to N100 billion. The original bond has a tenor of 10 years.

Same day, there will also be a re-opening bond 14.70% FGN JUN 2033 having a tenor of nine years and eight months. In addition, there will also be the 15-year 15.45% JUN 2038 which has a term to maturity of 14 years and eight months plus another offer which is the 15.70% FGN JUN 2053 with a term to maturity of 29 years and eight months.

It should also be noted that the same offers will be floated on 13 November 2023 and 11 December 2023 respectively.