Nigerian Treasury Bills (NTB) are short-term government debt securities issued by the Central Bank of Nigeria (CBN) on behalf of the Federal Republic of Nigeria (FGN) to finance government expenditure. They are also primary market instruments for regulating money supply via Open Market Operations (OMO). They can be sourced via the Primary or Secondary market as well as from OMO (for Deposit Money Banks and Indigenous investors only).
Features & Benefits
- Tenors of 91,182 and 364 days are available through the primary and market.
- They are issued at discount to their face value
- Interest is payable upfront.
- Tax free income: Income is not subject to withholding tax.
- Free from default risk: repayment is guaranteed at maturity
- Collateral for borrowing: used as collateral to raise funds
- Easily re-discounted to provide cash
- Tradable in the secondary market
Procedure for investing in Treasury Bills
The operational laid down procedure for investing in Treasury Bills is hoisted and can be obtained from the Treasury Portal.
The Nigerian Bond Market
Federal Government of Nigeria (FGN) Bonds are long term debt obligations of the Federal Government of Nigeria. They are administered by the Debt Management Office of Nigeria (DMO) and the Central Bank of Nigeria is the Registrar to the Bonds.In 2006, the DMO through the licensing of Primary Dealers Market Markers (PDMMs), made secondary market trading of the FGN to be more vibrant. The primary function of the PDMMs is to create liquidity in the FGN Bonds through the two-way quote market
FGN bonds are issued with tenors of 3, 5, 7, 10 and 20 years and can be acquired at primary and secondary markets.
Coupon (Interest) is paid semi-annually to bond holders. The coupon rate will depend on the initial yield fixed for the fresh issue of the bond and this runs throughout the life span of the bond.
Branches are advised to contact Treasury whenever we have customers who are desirous of investing in Bonds.