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Frequently Asked Questions

Frequently Asked Questions

If you are in urgent need of funds, you may sell your T-bills before it matures, using the OTC market. Whether you will sell for more or less of your face value depends on the forces of demand and supply.

T-bills can be purchased both at the primary and secondary markets.
  • Primary Market This is where new issues of securities are available for sale. The market for new issues in all government securities is the Issues Office, Central Bank of Nigeria.
A new issue of T-Bills occurs bi-monthly and an issuance calendar is normally made public on a quarterly basis. All investments are by auction. Subscriptions at this market are for 91 days, 182 days, and 365 days. “An advertisement, inviting bids for the securities, is placed in selected national dailies in advance of the auction. The amount of securities being applied for must have a minimum value of N50,001,000 and in multiples of N1,000 thereafter. Subscription is open to banks, discount houses, corporate bodies, institutions, and individuals.
  • Secondary Market
A secondary market is a market for the trading of previously issued securities. Hence, the tenors of the securities traded are shorter than the original tenors and the players in the markets include banks and discount houses.
  1. Send an email mandate for the FGN Bond purchase
  2. Thebrooksecurities advises on FGN Bond availability stating price/yield.
  3. Client funds Thebrooksecurities Finance and Investment
  4. FGN Bond is purchased for the client and advice is sent accordingly.

It is very easy to calculate the returns on your investment, and how this is paid. If for example, you purchase 364 days T-Bills worth ₦100,000 at a 10% discount rate, CBN only debits your account of ₦90,000. At the end of the maturity period, you are paid your face value sum of ₦100,000.

There are three (3) tenors available: 91 days, 182 days, or 364 days. Your investment matures after the expiration of the tenor.

As T-Bills are based on full faith of the Federal Government of Nigeria, they are considered one of the most secure investments to make. They can also be used as collateral and are accepted by all banks.
The interest will be paid quarterly into your bank accounts while the principal will be paid at maturity (the end of the tenor, two or three years) depending on what duration you subscribed to.  

For the Primary Market auctions the minimum subscription was recently reviewed upwards to N50,001,000. However, purchases in the secondary could be as low as N1, 000,000 depending on the Dealer.

FGN Bonds are long-term Debt instruments issued by the Federal Government of Nigeria with tenors which are typically over 3 years. They are issued on a monthly base however with a minimum investment size of N50,000,000. FGN Bond is different from the Federal Government of Nigeria Savings Bond (FGNS Bond) issued every first week of the month for tenors of 2 and 3 years and with N5,000 minimum investment. Though the FGN Bond is issued in a large ticket size during the monthly primary auction, it trades in the secondary market in smaller sizes. Interest Payment on FGN Bonds are made biannually unlike the FGNS Bond where interest payment is made quarterly. FGN Bonds are normally issued at N100 par value. Where the yield (return to investor) on a Bond is lower than the coupon such a Bond is said to trade at a premium price ie the price is above N100. Where the yield (return to investor) on a Bond is higher than the coupon rate the Bond trades at a discount ie price is less than N100. Bond would normally trade clean (without interest consideration) but settle dirty (with interest consideration). Bonds issued in the primary market are tradable in the secondary market thus clients can purchase such Bonds of various maturities.
  1. Guarantees fixed biannual income
  2. Lesser price volatility compared to Equity investment.
  3. Tradable before the maturity date.
  4. Higher rate of return compared to Bank Deposit.