The Debt Management Office (DMO) has opened subscription for two federal government of Nigeria (FGN) savings bonds at N1,000 per unit.
The first offer is a two-year savings bond due to mature on May 15, 2026, at 17.407 percent per annum, while the second is a three-year savings bond due to mature on May 15, 2027, at an interest rate of 18.407 percent per annum.
The FGN savings bond offer is tailored and targeted at retail investors with guaranteed quarterly interest payment and repayment of the principal at maturity.
In a statement on its X handle on Monday, DMO said the offers opened on May 6, 2024, will close by May 10, 2024.
The DMO said the settlement date is May 15, 2024, while coupon payment dates are made quarterly – August 15, November 15, February 15 and May 15.
According to the DMO, “They are offered at 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.
“Interest is payable quarterly while bullet repayment is made on the maturity date.”
It said the savings bonds, like all other government securities, are backed by the full faith and credit of the federal government and charged upon the general assets of Nigeria, adding that they also qualify as securities in which trustees can invest under the Trustees Investment Act.
“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption and pension funds, amongst other investors,” DMO said.
The agency further said the bonds are listed on the Nigerian Exchange Limited ( NGX) and qualify as a liquid asset for liquidity ratio calculation for banks.
The federal government has so far this year raised N3.1 trillion in FGN bonds and N7.92 trillion in T-bills between January and April 2024, totalling N11.2 trillion.
These bonds, being crucial instruments for the government’s debt management strategy, serve multiple purposes, including providing investors with a relatively safe investment option, assisting in managing the country’s debt profile, and facilitating efficient fund management.