The Debt Management Office has opened subscription for two Federal Government of Nigeria Savings Bonds, with each unit priced at N1,000 and interest rates of 13.071 percent and 14.071 percent per annum.
The two year savings bond will mature on Oct. 14, 2028, while the three year bond will mature on Oct. 14, 2029. The offer opened on Oct. 5 and will close on Oct. 9, with settlement scheduled for Oct. 14, the DMO said.
The DMO said the two year bond carries an annual interest rate of 13.071 percent, while the three year instrument offers 14.071 percent per annum.
The bonds are available at N1,000 per unit, with a minimum subscription of N5,000 and subsequent subscriptions in multiples of N1,000. Individual investors can subscribe up to a maximum of N50 million.
Interest will be paid quarterly on Jan. 14, April 14, July 14 and Oct. 14, while the principal will be repaid in full at maturity.
The DMO said the securities are backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria. They are also listed on the Nigerian Exchange and qualify as liquid assets for banks when calculating liquidity ratios.
The FGN Savings Bond is designed primarily for retail investors, allowing individuals to invest directly in government securities without requiring the larger capital typically associated with conventional government bond offerings.
According to the DMO’s investor information, subscriptions can be made either directly through the DMO’s subscription platform or through approved distribution agents. Investors are required to have a Central Securities Clearing System account, although one can be opened as part of the subscription process where necessary.
The DMO also said the bonds qualify as government securities under relevant tax legislation and can be held by trustees under the Trustee Investment Act.
The October offer comes as the Federal Government continues to use domestic debt instruments to mobilise funds from investors while providing individuals with access to fixed income investments.
For retail investors, the relatively low minimum entry requirement provides an avenue to participate in the government securities market, while the quarterly coupon structure offers periodic income throughout the investment period.
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