The Federal Government of Nigeria on Monday opened the May savings bonds for subscription.
An FGN savings bond is a bond issued by the Debt Management Office on behalf of the Nigerian government. The bond is targeted at retail investors and includes a guaranteed interest payment and repayment of the principal.
The Director-General, DMO, Ms Patience Oniha, said the FGN savings bond was introduced to promote financial inclusion and attract small investors into the capital market.
The minimum subscription for the FGN savings bond is N5,000 with a maximum of N50m.
In a notice issued by the DMO, the Federal Government said the savings bonds up for subscription were a two-year bond due May 2021 at 11.745 per cent per annum and a three-year bond due May 2022 at 12.745 per cent per annum.
The DMO said it was authorised by the Federal Government to receive applications for subscription of the savings bond.
It said the offer was open from May 6 to May 10 with the settlement date being May 15.
It added that the coupon payments would be made on August 15, 2019, November 15, 2019, February 15, 2020 and May 15, 2020.
The statement read in part, “The bonds are offered at N1,000 per unit, subject to a minimum subscription of N5,000 and in multiples of N1,000 and a maximum subscription of N50m.
“The bonds, which are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country, qualify as securities in which trustees can invest under the Trustee Investment Act. Interest is payable quarterly and the bullet repayment is on the maturity date.”
According to the DMO, the bonds also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds, among others.
It said the bonds would be listed on the Nigerian Stock Exchange and would qualify as a liquid asset for liquidity ratio calculation for banks.
“Interested investors should contact the stockbroking firms appointed as distribution agents by the Debt Management Office,” the statement added.