Modupe Gbadeyanka
By Modupe Gbadeyanka
The Debt Management Office (DMO) has announced that investors willing to subscribe to the Federal Government of Nigeria (FGN) Savings Bond for the month of March 2019 can now begin to do so.
The debt office commenced the sale of the Savings Bond for this month on Monday and will end at 12 noon of Friday, March 8, 2019.
Like in the previous exercises, the Nigerian government is offering two different tenors of the debt instrument.
It is willing to sell the two-year savings bond at 11.62 percent, while the three-year maturity is going for 12.62 percent.
Investors interested in partaking in the auction can subscribe N1,000 per unit subject to a minimum offering of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
The Savings Bonds will have most of the features of the existing FGN Bond plus other features/benefits to the bondholder.
It will be backed by the full faith of the Federal Government of Nigeria and is therefore deemed risk free.
The FGN Savings bond qualifies as securities in which trustees can invest under the Trustee Investment Act and also stands 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.
It is also listed for trading on the floor of the Nigerian Stock Exchange (NSE) and further qualifies as a liquid asset for liquidity ratio calculation for banks.
Business Post reports that every quarter, federal government pays interest to those who invest in the FGN savings bond.
