The Debt Management Office has opened subscription for two Federal Government of Nigeria bonds valued at N1tn, with a minimum subscription of N50m.

The DMO announced the offer on Monday, comprising a new 10-year FGN bond valued at N400bn and due in September 2036.

The second offer is a N600bn reopening of a 15-year FGN bond due in 2038, with a coupon rate of 15.45 per cent per annum.

The subscription opened on September 14, while settlement is scheduled for September 16.

According to the DMO, the bonds are offered at N1,000 per unit, subject to a minimum subscription of N50m and multiples of N1,000 thereafter.

It said successful bidders for the reopened bond would pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, in addition to any accrued interest.

The DMO said interest on the bonds would be paid semi-annually, while the principal would be repaid at maturity.

It explained that the securities were backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.

The bonds qualify as investments for trustees under the Trustee Investment Act and as government securities under the Company Income Tax Act and Personal Income Tax Act for relevant tax exemptions.

The DMO also said the securities were listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange.

The bonds qualify as liquid assets for banks when calculating their liquidity ratios.

FGN bonds are fixed-income securities issued by the DMO on behalf of the Federal Government to raise funds for government expenditure, including infrastructure and other public projects.