DMO Issues Two FGN Savings Bond For Subscription

The Federal Government through the Debt Management Office (DMO) has offered for subscription, two tranches of Federal Government of Nigeria’s savings bonds at N1,000 per unit.

The Debt Management Office (DMO) disclosed in a circular on Monday that one of the bonds is a 2-year savings bond due on July 14, 2023, at an interest rate of 8. 35 per cent per annum, while the other is a 3-year FGN Savings Bond due July 14, 2024, at 9.35 per cent per annum

According to the DMO, the saving bonds are opened at N1,000 per unit, with a minimum subscription of N5,000 in multiples of N1,000 thereafter and subject to a maximum of N50 Million.

The DMO fixed the bond opening date on July 5th 2021 and closes on July 9th, 2021.

It also disclosed that the Settlement Date is fixed on July 14, 2021, and the Coupon Payment Dates are October 14, January 14, April 14 and July 14.

According to the DMO, the interest payment is payable quarterly, while redemption is at a bullet repayment on the maturity date.

” The bond qualifies as securities in which trustees can invest under the Trustee Investment Act. Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors.”

The bonds which are listed on the Nigerian Stock Exchange also qualifies as a liquid asset for liquidity ratio calculation for banks.

It also added that the security is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

This fresh call for bond subscription is coming three months after the DMO offered for subscription, two Federal Government of Nigeria’s savings bonds at N1,000 per unit.

In April, the DMO listed a two-year savings bond due on April 14, 2023, at an interest rate of 5.522 per cent per annum, while the other is a 3-year FGN Savings Bond due April 14, 2024, at 6.522 per cent per annum.

The Debt Management Office (DMO) had also on March 18th 2021 listed its third Sovereign Sukuk “N162.557 Billion 7- year 11.20 per cent AL IJARAH SOVEREIGN SUKUK DUE 2027” on The Nigerian Stock Exchange and the FMDQ Securities Exchange.

The Sukuk which at the time of issuance was massively subscribed to the tune of N669.124 Billion or 446 per cent, was issued to finance 44 economic road projects across the six (6)-geopolitical zones. With the listing, investors who are already holding the SUKUK can trade them while new investors have an opportunity to buy the SUKUK in the secondary market.