The Debt Management Office is now taking subscriptions for two savings bonds offered by the Federal Government. Each bond is priced at N1,000 per unit and has interest rates of 17.06% and 18.046%, respectively.
The DMO revealed this information in a statement on its website that was accessed by PUNCH on Wednesday.
The DMO is offering a two-year savings bond that is expected to mature on April 9, 2026, with an annual interest rate of 17.046%.
This bond is designed for individual investors and guarantees quarterly interest payments along with repayment of the principal at maturity.
The second bond is a three-year savings bond that will mature on April 9, 2027, with an interest rate of 18.046%.
Similar to the two-year bond, this option also provides quarterly interest payments and repayment of the principal.
The DMO is an agency of the government established to centrally manage Nigeria's debt.
There has been an increase in investor interest in the FGN Savings Bond, with a 19.3% year-on-year rise in subscription value, reaching N17.9bn by the end of December 2023, mainly due to favorable interest rates.
These savings bonds, along with all government securities, are backed by the full faith and credit of the federal government. They also qualify as securities under the Trustees Investment Act.
Furthermore, they meet the criteria for tax exemption and are considered government securities as per the Company Income Tax Act and Personal Income Tax Act.
The bonds are listed on the Nigerian Exchange Limited and are used as liquid assets for banks’ liquidity ratio calculations.
The subscription period for these bonds started on April 1, 2024, and will close on April 5, 2024.
The settlement date is April 9, 2024, while the coupon payment dates are as follows: Quarterly – July 9, October 9, January 9, and April 9.
The DMO mentioned that "the minimum subscription is N5,000, with multiples of N1,000 thereafter, up to a maximum of N50 million. Interest is paid quarterly, and the principal is repaid as a bullet payment upon maturity."
Previously, the DMO initiated the subscription process for two-year and three-year Federal Government of Nigeria bonds for March 2024 with an interest rate of up to 16.097%.
This announcement was made in a statement on the DMO’s official website. The subscription period lasts for five days, from March 4 to March 8, 2024.
