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Debt Securities

What you get if you buy this month’s FGN Savings Bond 

The Debt Management Office (DMO) has released details for the November 2018 FGN Savings Bond offer.

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The Debt Management Office (DMO) has released details for the November 2018 FGN Savings Bond offer.

Here are the details.

How much can I buy?

N1,000 per unit, subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000.

What is the minimum amount I can buy?

Based on the above, the minimum amount you can buy is N5,000.

Interest rates

A 2-year FGN savings bond, due November 14, 2020, is 12.390% per annum.

A 3-year FGN savings bond, due November 14, 2021, is 13.390% per annum.

When are coupon payment dates?

February 14, May 14, August 14, November 14.

When will the principal be paid?

Bullet repayment on the maturity date.

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What about security for my money?

The loan is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

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From where can I buy it?

Contact your stockbroker if you want to buy it. And remember that the offer closes by Friday this week (November 9).

What do you get when you invest?

Invest N100,000 – N12,390 per annum for a 2-year savings bond, and N13,390 per annum for a 3-year savings bond.

Invest N500,000 – N61,950 per annum for a 2-year savings bond, and N66,950 per annum for a 3-year savings bond.

Invest N1 Million – N123,900 per annum for a 2-year savings bond, and N133,900 per annum for a 3-year savings bond.

Stanbic 728 x 90

Remember that interest is paid quarterly. To get how much you will earn quarterly, divide what you get above by 4.

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Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via [email protected]

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Debt Securities

MTN invests N121 billion in fixed deposits, treasury bills, etc

MTN Nigeria invested a whopping N121.5 billion in bonds, treasury bills and foreign currency deposits in 2020.

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Nigeria’s largest telecommunications company, MTN Nigeria invested a whopping N121.5 billion in bonds, treasury bills and foreign currency deposits in 2020. This compares to just N9 billion in 2019 suggesting the GSM giant had challenges deploying the capital raised during the year.

MTN raised N143.96 billion in several syndicated facilities during the year which was to be utilized for its network expansion plans. However, the Covid-19 induced lockdowns affected capex activities forcing most companies to freeze spending on anything that is capital intensive. Effective Interest Rates for most of the loans obtained by MTN range between 3.5% and N5.8% per annum.

From the breakdown seen by Nairametrics, MTN invested N93 billion in naira denominated fixed deposits, equivalent of N19 billion in US dollar deposits and another N34.8 billion in treasury bills. The total amount invested earned MTN about N15.84 billion in income which it used to offset its finance cost of over N129 billion.

Why it matters

Interest rates for risk-free government securities fell drastically in 2020 as investment outlets dried up locally. This triggered a massive influx of money into the stock market helping it to close above 50%, one of the best performing in the world last year.

  • For companies like MTN with a significant cash hoard, treasury operations are a significant part of the activities of its finance department.
  • The investments in risk-free treasury bills despite the negative real return (when interest rate is adjusted for inflation) suggest corporates will rather fix their money in treasury bills than leave it idle in commercial banks.
  • It also suggests corporates like MTN are more favourably disposed to lending to the government despite Nigeria’s ballooning public debt and its attendant risk to its credit ratings.
  • Despite the investments, MTN still closed the year with about N275 billion cash in its balance sheet.

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Debt Securities

Emzor Pharmaceuticals accesses capital markets for the first time, lists N13.7bn Bond on NGX

Emzor Pharmaceutical Industries Limited, has listed its N13.7bn 5-Years Series 1 Bond exclusively on NGX.

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Wholly-owned, indigenous pharmaceutical manufacturing group, Emzor Pharmaceutical Industries Limited, has listed its N13.7 billion 5-Years Series 1 Bond exclusively on the Nigerian Stock Exchange Limited “NGX” Platform.

Information contained in a statement published on the NGX website revealed that the N13.7Bn 5-Years Series 1 Senior Unsecured Fixed Rate Bond due by 2026, under the company’s N50 billion Debt Issuance Programme, is the first public instrument listed by the Nigerian pharmaceutical group.

Why this matters

In line with the objective of the NGX Group, Emzor capitalized on the robust size of the Nigerian Capital Market to bridge funding gaps and restructure its existing debt profile, through its N50 billion Debt Issuance Programme.

Details of the transaction revealed that Emzor was able to access the domestic debt capital markets for the first time and raise 5 years of financing in local currency using a corporate bond, with the issuance of its N13.73 billion 5-Year 10% Series 1 Senior Unsecured Fixed Rate Bond.

READ: This woman turned her little pharmacy shop into one of the biggest Pharmaceutical companies in Nigeria

The proceeds from the bond initiated by Emzor Pharma Funding SPV Plc, a special purpose vehicle set up to finance Emzor’s funding requirements, will be used to finance the purchase of notes and other debt securities issued by Emzor, in accordance with the terms of the Master Notes Purchase Agreement (the “MNPA”).

The N13.73 billion Series 1 Unsecured Bonds accorded with an ‘A-’ credit rating by Global Credit Rating Co., was undersubscribed by 8.47% as the intended capital was pegged at N15 billion.

READ: Dangote Cement, MTN, Nigerian Breweries, 9 others raise N478.4 billion from commercial papers

What you should know

  • Emzor Pharmaceutical Industries Limited is a renowned manufacturer of quality pharmaceutical products and medical consumables. The company has grown its product portfolio from a modest four products in 1987, to more than 120 different products in recent times.
  • The company has a wide range of products in the analgesic, anti-malaria, vitamin/haematinics/multivitamin supplement, anti-helmintic, antibiotics and therapeutic categories.

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