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Subscription Opens for FGN Savings Bond for August

By Dipo Olowookere

The Debt Management Office (DMO) has commenced the sale of Federal Government of Nigeria (FGN) Savings Bond for the month of August 2018.

A notice released on August 6, 2018 by the debt office on its website disclosed that the bond subscription period will run from 8am on today to 12noon of Friday, August 10, 2018.

According to the notice obtained by Business Post, the DMO would be offering the 2-Year FGN Savings Bond due August 15, 2020 at 10.668 percent per annum; and the 3-Year FGN Savings Bond due August 15, 2021 at 11.668 percent per annum.

The bond would be sold 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.

The DMO explained that interest on the savings bond would be paid quarterly, while the “bullet repayment [is] on the maturity date.

Apart from being backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria, the savings bond also qualifies as securities in which trustees can invest under the Trustee Investment Act.

The bond also 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 savings bonds are listed on the Nigerian Stock Exchange (NSE) and also qualify as a liquid asset for liquidity ratio calculation for banks.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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