The FMDQ Group, through its subsidiary, FMDQ Security Exchange Limited, has admitted the Axxela Funding 1 PLC N11.50 billion Series 1 Bond on its platform.
According to News Agency of Nigeria (NAN), this was disclosed by the FMDQ Group in a statement that was issued on Thursday, July 9, 2020, in Lagos.
The statement explained that FMDQ admitted the N11.5 billion Series 1 Bond, which is under the Axxela Funding N50 billion bond programme on its platform.
FMDQ explained that Axxela Funding 1 PLC is a special purpose vehicle (SPV) incorporated by Axxela Limited to raise funds through the issuance of debt securities in the domestic capital market.
According to the statement, “Axxela Limited, owned by Helios Investment Partners, is a natural gas shipping company on the West African Gas Pipeline, providing unique energy solutions with presence in Nigeria and gas export operations in neighbouring West African countries.
“The admittance of the Axxela bond is testament to the opportunities which the Nigeria Debt Market Capital (DCM) avails to corporates in diverse business areas and further, to the potential of the market to support stakeholders effectively even as they carry on their activities in the face of the pandemic.
“The Axxela bond, by its listing on FMDQ, shall be admitted onto the FMDQ Daily Quotations List; thus, promoting the much-needed transparency for investors and providing a credible basis for portfolio valuation daily.
“Also, through the global visibility which the FMDQ website and systems guarantee, the corporate profile of the issuer is raised even further ahead of tapping into other opportunities in the Nigerian capital market.”
The FMDQ in its statement revealed that the Nigerian Debt Capital Market plays an important role in the efficient mobilization and allocation of resources in the economy. Despite the impact of the current economic crisis, the market had continued to effectively support corporate firms looking to expand their business operations.
Therefore, the FMDQ, in its role as a market organizer of the Nigerian Debt Capital Market, amongst others, has continued to provide stakeholders in the Nigerian capital market with a credible and robust platform for capital access, risk management and transfer of value.
This means that Axxela Series 1 Funding will have the opportunity to global visibility through FMDQ Exchange’s website and systems.
The Series 1 bond would be included in FMDQ Daily Quotations List, in order to ensure and maintain information transparency.
DMO debunks misappropriation rumour, clarifies missing N2.2 trillion in 2018 Appropriation Act
The DMO has debunked rumours of misappropriation of a N2.2 trillion debt service provision in the 2018 Appropriation Act.
The Debt Management Office of Nigeria (DMO) has vehemently denied the rumour making the rounds that it was unable to account for the sum of N2.2 trillion allocated to its office in the 2018 Appropriation Act.
The agency in a recent disclosure available on its website described the claims as not only false but extremely misleading.
It is pertinent to note that the rumours became rife, after DMO honoured an invitation by the Public Accounts Committee of the House of Representatives, to explain how it spent the sum of N2.2 trillion provided in the 2018 Act. The DMO appeared before the aforementioned committee on the 26th of February, 2021.
Clarifying the issue, the DMO explained that of the N2.2 trillion provided in the 2018 Act; only the sum of N721, 251,798.00 was appropriated to its agency, while the remaining N2.1 trillion was earmarked for Debt Service. In lieu of this, the DMO emphasized that the appropriated sum of ₦2.2 trillion was not available as the DMO’s total allocation.
What they are saying
Commenting on the issue, a part of the press release reads: ‘’ The DMO wishes to emphasize that the provisions in the Annual Appropriation Acts for Debt Service, including the 2018 Appropriation Act, are dedicated for Debt Service payments only; that is, for the repayment of Principal, Interest and Other Charges for both Domestic and External Debt.
“Indeed, the funds for Debt Service are never released to the DMO for spending, rather, in line with the mandate of the Office of the Accountant-General of the Federation (OAGF), the funds are domiciled with the OAGF, who on the advice of the DMO, effects payments directly to the creditors as at when due. Such creditors include multilateral and bilateral lenders like the World Bank, African Development Bank, Exim Bank of China, investors in Nigeria’s Eurobonds, as well as, investors in securities issued in the domestic market such as FGN Bonds, SUKUK, Green Bonds and Nigerian Treasury Bills.”
It also went further to justify the need for Debt Servicing, emphasizing that: “The general public is invited to note that servicing of the public debt is absolutely necessary to ensure that Nigeria remains credit-worthy and retains or improves on its sovereign rating which ultimately, will support growth and development. It is for this reason as well as transparency purposes, that Debt Service is expressly provided as a line item in the Annual Appropriation Acts.’’
What you should know
- The 2018 Appropriation Act authorized the Federal Government of Nigeria to withdraw a total sum of N9, 120,334,988,225 from the Consolidated Revenue Fund, in a bid to meet expenditure requirement in the 2018 fiscal year.
- A breakdown of the 2018 Act showed that; N3,512,677,902,077 was earmarked for recurrent expenditure, N2,873,400,351,825 (capital expenditure), 2,203,835,365,699 (Debt Service and DMO’s allocation) and N530,421,368,624 (Statutory transfers).
DMO announces March 2021 FGN Savings Bond offer for subscription
The DMO, on behalf of the Federal Government of Nigeria, has offered for subscription, the March 2021 FGN Savings Bond.
The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria has offered for subscription, the March 2021 Federal Government of Nigeria Savings Bond.
This is contained in a notification published on the website of the agency on Monday. According to the notification, the savings bond offer comes in two tranches;
- 2-year FGB Savings Bond due March 10, 2023: 5.181% per annum
- 3-year FGN Savings Bond due March 10, 2024: 6.181% per annum
- Opening Date: March 1, 2021
- Closing Date: March 5, 2021
- Settlement Date: March 10, 2021
- Coupon Payment Dates: June 10, September 10, December, and March 10
- Units of sale: 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 million.
According to the circular, the offer is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.
Interested investors were however advised to visit their website in order to get the list of stockbroking firms appointed as distribution agents.
What you should know
- Nairametrics had reported the offer for subscription of a similar Savings Bond in February with interest rates of 4.214% and 5.214% per annum for 2 years and 3 years tenor respectively.
- The interest rate for the latest offer is, however higher than the offer announced in February. This could be a move to attract more investors to subscribe to the securities.
- The FGN Savings Bond is an investment product issued through the Debt Management Office (DMO) on behalf of the Federal Government.
- It also qualifies as securities in which trustees can invest under the Trustee Investment Act, and is listed on the Nigerian Stock Exchange.
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