DMO opens subscription for two federal government savings bonds

The Debt Management Office (DMO) has opened subscriptions for two of the 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 April 9, 2026, at 17.046 per cent per year, while the second is a three-year savings bond due to mature on April 9, 2027, at an interest rate of 18.046 per cent.

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 Tuesday, DMO said the offers which opened on April 1, 2024, will close by April 5, 2024.

The DMO said the settlement date is April 9, 2024, while coupon payment dates are made quarterly – July 9, October 9, January 9 and April 9.

“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 stated.

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.

Investors’ interest in the FGN Savings Bond has been growing in recent times as the value of subscription rose by 19.3 per cent to N17.9 billion Year-on-Year (YoY) as at the end of December 2023, a situation attributed to favourable interest rate regime.

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