FG Savings Bond Subscription Starts At 18.06%, DMO Announces

Subscriptions for two Federal Government savings bonds, each priced at N1,000 per unit, have been announced by the Debt Management Office (DMO). These bonds offer interest rates of 17.06% and 18.046%, respectively.

The disclosure came through a statement shared on its website and sighted by Africa Today News, New York, on Wednesday.

The DMO presented a two-year savings bond, with an anticipated maturity date of April 9, 2026, featuring an annual interest rate of 17.046 percent.

This bond is tailored for retail investors, offering assured quarterly interest payments in addition to the repayment of the principal amount upon maturity.

The alternative is a three-year savings bond scheduled to reach maturity on April 9, 2027, with an interest rate of 18.046 percent.

Similar to the two-year bond, this option also provides quarterly interest payments and principal repayment.

DMO is a government agency established to centrally coordinate the management of Nigeria’s debt.

The FGN Savings Bond has witnessed a substantial uptick in investor interest, with a noteworthy 19.3 percent year-on-year surge in subscription value, totaling N17.9 billion by December 2023. This surge is primarily attributed to favorable interest rates.

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Like all government securities, these savings bonds are guaranteed by the full faith and credit of the federal government. Furthermore, they meet the standards to be recognized as securities in accordance with the Trustees Investment Act.

Moreover, they meet the criteria for tax exemption and are classified as government securities in accordance with both the Company Income Tax Act and Personal Income Tax Act.

Listed on the Nigerian Exchange Limited, these bonds act as liquid assets included in banks’ liquidity ratio calculations.

This announcement was made in a statement on the DMO’s official website. The subscription period is set to last for five days, running from March 4 to March 8, 2024.

The subscription window for these bonds opened on April 1, 2024, and is set to close by April 5, 2024.

These bonds will be settled on April 9, 2024, and coupon payments will be made quarterly on July 9, October 9, January 9, and April 9.

Beforehand, the DMO began the subscription process for two-year and three-year Federal Government of Nigeria bonds for March 2024, offering an interest rate of up to 16.097 percent.

The disclosure was communicated through a statement on the DMO’s official website, outlining a subscription period lasting five days, from March 4 to March 8, 2024.

Africa Today News, New York

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