FGN bonds are Federal Government of Nigeria securities issued under the authority of Debt Management Office (DMO). Since 2003, DMO has been regulating the activities of the FGN bonds market, while the Central Bank of Nigeria acts as the Issuing House and the Registrar. The bonds are listed and traded on the floors of the Nigerian Stock Exchange. The Central Securities Clearing Systems Ltd acts as the depository of the bonds listed on the Nigerian Stock Exchange.
- An introduction to FGN Bonds
- The Regulators/Agents in the FGN Bond Operations
- The licensed Primary Dealer and Market Makers (PDMMs)
- How to invest in FGN Bonds
- Bond Auctions, Operations and Results
- FGN Bond Issuance Calendar
- Current and Historical data on FGN Bonds
- Frequently Asked Questions(FAQs)
- Information on contractors and pension bonds
About FGN Bonds
FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria issued under the authority of DMO and listed on the Nigerian Stock Exchange. The FGN has an obligation to pay the bondholder the principal and agreed interest as they fall due.
When you buy FGN bonds you are lending to the federal government for a specified period of time. The FGN bond is considered as the safest of all investments in domestic currency securities market because it is backed by the ‘full faith and credit’ of the government. They have no default risk, meaning that it is virtually certain your interest and principal will be paid as and when due. The income you earn is exempt from state and local taxes.
The Government Issues Bonds for the following reasons
- To finance government deficits in a non-inflationary and sustainable manner
- To enhance fiscal discipline and for the management of monetary policies
- To restructure the existing debt stock of short term debt to longer term obligations
- To establish a benchmark yield curve, which acts as a reference for pricing other bonds issued by other bodies
- To develop the domestic bond market on a sustainable basis
- To enhance and deepen the savings and investment opportunities
Special Purpose FGN bonds are bonds issued to meet specific needs of the federal government. For instance, following the approval of Mr. President, special purpose bonds were issued to selected banks for settlement of N75 billion pension arrears in 2006. Five deposit money banks participated in the private placement arrangement. In addition, in 2006 FGN floated bonds for the payment of debt owed to local contractors worth N91.7 billion. Recently, FGN indicated interest to raise funds through bonds for funding specific projects such as Methanol plant, revival of textile industry, terminal wages of workers, building of infrastructural facilities, etc.
Nature of FGN bonds
- Denomination: minimum subscription of N10,000.00 + multiple of N1,000.00 thereafter
- Yield: - Interest payment
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- Fixed interest rates: Most FGN bonds have fixed interest rates which are paid semi-annually:
- Floating interest rates: Some FGN bonds (e.g. 3rd & 4TH tranches of the 1st FGN bonds) have floating rates of interest which fluctuates around a reference rate(NTB rates) on the basis of specified parameters
- There are also zero-coupon bonds(not yet in issue in Nigeria) whereby both interest and principal are repaid at the final maturity date of the bond
- Tenor: Minimum of two (2) years. There are bonds with maturities of 3. 5, 7 and 10 years, in issue and for the future we may have bonds with maturities of 15, 20,30 years or more
- Default Risk: FGN bonds as a sovereign debt are the safest investment instrument. Default risk is nil. The Government always pays what is due to subscribers on the agreed date
These are banks and discount houses appointed by the DMO to act as authorized dealers in FGN bonds. These PDMMs are required among other functions to take up, market and distribute primary issues of FGN bonds, provide for secondary markets liquidity in FGN bonds by making two--way quotes in all market conditions. That is, they are obliged to buy or sell at these rates while dealing with customers. The twenty one (21) PDMMs institutions are:
1. Access Bank Nigeria Plc
Plot 1665, Oyin Jolayemi Street,
Victoria Island,
Lagos.
Tel: +234 (01) 4619264-9
Email: info@accessbankplc.com
Website: www.accessbankplc.com
2. Afribank Nigeria Plc
Plot 51/55, Broad Street,
P.M.B.12021,
Lagos.
Tel: +234 (01) 2641566-9, 2644135, 2664135
Email: info@afribank.com
Website: www.afribank.com
3. Citibank Nigeria Ltd
27,Kofo Abayomi Street,
Victoria Island,
P.O. Box 6391,
Lagos.
Tel: +234 (01) 4638400, +234(0)2798400
Email: gcibng.nibtreas@imceu.eu.ssmb.com
Website: www.citigroup.com
4. Diamond Bank Plc
Plot 1261, Adeola Hopewell Street,
P.O. Box 70381,
Victoria Island,
Lagos.
Tel: +234 (01) 2702500, 2620740-9.
Email: info@diamondbank.com
Website: www.diamondbank.com
5. Ecobank Nigeria Plc.
Plot 21, Ahmadu Bello Way,
P.O. Box 72688,
Victoria Island,
Lagos.
Tel: +234 (01) 2626638-42, 2626710-14
Email: ecobank@ecobank.com
Website: www.ecobank.com
6. Fidelity Bank Nigeria Plc.
No 2, Kofo Abayomi Street,
P.O. Box 72439
Victoria Island,
Lagos.
Tel: +234(01) 2700530-3
Email: info@fidelitybankplc.com
Website: www.fidelitybankplc.com
7. First Bank of Nigeria Plc.
Samuel Asabia House,
35 Marina,
P.O. Box 5216,
Lagos.
Tel: +234 (01) 2665900-20
Email: suggestions@firstbanknigeria.com
Website: www.firstbanknigeria.com
8. First City Monument Bank Plc.
Primrose Tower,
17A Tinubu Street,
P.O. Box 9117,
Lagos.
Tel: +234 (01) 2665944-53, 2793030
Email: caf@firstcitygroup.com
Website: www.firstgroup.com
9. Guaranty Trust Bank Plc.
Plural House, Plot 1669,
Oyin Jolayemi Street,
P.O. Box 75455,
Victoria Island,
Lagos.
Tel: +234 (01) 2714580-9, 2622650-64.
Email: ctu@gtbank.com
Website: www.gtbplc.com
10. Oceanic Bank International Plc.
Herbert Macaulay Way,
Wuse Zone 6,
P.M.B 5048,
Abuja.
Tel: +234 (09) 5237997, 5236209.
Email: customercare@oceanicbank.com
Website: www.oceanicbanknigeria.com.
11. Plantinum Habib Bank Plc.
Plot 707, Adeola Hopewell Street,
Victoria Island,
Lagos.
Tel: +234 (01) 4617341-50, 4617151-56
Email: customerrelations@bankphb.com
Website: www.bankphb.com
12. Stanbic IBTC Bank Plc.
IBTC Place,
Walter Carrington Crescent,
P.O. Box 71707,
Victoria Island,
Lagos.
Tel: +234 (01) 2626520, 2712400
Email: IBTC@IBTC.com
Website: www.stanbicibtcbank.com.
13. Standard Chartered Bank Nigeria Ltd
105B Ajose Adeogun Street,
P.M.B. 80038,
Victoria Island,
Lagos.
Tel: +234 (01) 2700025, 2707150-2, 2702156
Email: info@sc.com
Website: www.standardchartered.com.
14. Union Bank of Nigeria Plc.
Stallion Plaza,
36 Marina,
P.M.B 2027,
Lagos.
Tel: +234 (01) 2630361, 2631430, 2644374
Email: info@unionbankng.com
Website: www.unionbankng.com
15. United Bank for Africa Plc.
UBA House,
57 Marina,
P.O. Box 2406,
Lagos.
Tel: +234 (01) 2644651-700
Email: info@ubagroup.com.
Website: www.ubagroup.com
16. Zenith Bank Plc.
Zenith Heights,
Plot 87, Ajose Adeogun Street,
P.O. Box 75315,
Victoria Island,
Lagos.
Tel: +234 (01) 2781140-1.
Email: enquiry@zenithbank.com
Website: www.zenithbank.com
17. Associated Discount House Ltd
St. Nicholas House, 6th Floor,
28A, Catholic Mission Street,
Marina,
P.M.B 12511,
Lagos.
Tel: +234 (01) 4614892, 4614891.
Email: adh@adh-ng.com
Website: www.adh-ng.com
18. Consolidated Discounts Ltd
Bull Plaza 10th-12th Floors,
38/39 Marina,
P.M.B 12911,
Lagos.
Tel: +234 (01) 2644281-84, 2702640-5.
Email: cdl@cdlnigeria.com
Website: www.cdlnigeria.com
19. Express Discount Ltd
Marine View Plaza,
60 Marina,
P.O Box 4794,
Lagos.
Tel: +234 (01) 2641650-5.
Email: edl@expdisc.com
Website: www.expressdiscountlimited.com
20. First Securities Discount House Ltd
UAC House, 7th Floor, 1-5 Odunlami Street,
P.M.B. 12913,
Lagos.
Tel: +234 (01) 2640160-9, 2640150-9, 2702880-2
Email: info@fsdhsecurities.com
Website: www.fsdhgroup.com
21. Kakawa Discount House Ltd
Sterling Towers, 10th Floor,
20 Marina,
P.O. Box 4238,
Lagos.
Tel: +234 (01) 2645480-5, 2702290-4
Email: kdh@kakawa.com
Website: www.kakawa.com
Debt Management Office (DMO): DMO is the Agency authorized by statute to issue FGN Bonds on behalf of the Federal Government. The DMO also regulates the activities of the bond market and the Primary Dealer/Market Makers.
Central Bank of Nigeria (CBN): The Central Bank of Nigeria acts as the issuing House and the Registrars for FGN Bonds.
The Nigerian Stock Exchange (NSE): FGN bonds are listed and traded on the Floors of the Nigerian Stock Exchange.
Central Securities Clearing Systems Ltd (CSCS): Acts as the depository of the bonds listed on the Nigerian Stock Exchange. Investors who opted for physical certificates at the issue must have their certificates deposited in CSCS before transactions on them on the floors of the Nigerian Stock Exchange.
Security and Exchange Commission (SEC): The apex regulator in the capital market; it regulates the activities of all operators as far as operations and their transactions in the market is concerned.
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