DMO Begins Sale of Fresh 2, 3-Year FGN Savings Bonds

August 5, 2019
FGN Savings bond

By Adedapo Adesanya

The Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), has commenced the issuance of new 2-year and 3-year Saving Bonds maturing in August 2021 and August 2022 respectively.

The bonds, according to a circular released by the debt office, would be offered to investors at 10.30 percent for the 2-year paper and 11.30 percent for the 3-year notes.

In the notice to investors, the DMO said subscription for the monthly exercise commenced on Monday, August 5 and is expected to close on Friday, August 9, with the settlement date set for August 14, 2019.

The DMO further stated that the securities would be available to subscribers at the rate of 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.

It was disclosed that the interest on the bonds would be paid quarterly with the coupon payment set for November 14, 2019 then February 14, May 14, and August 14, 2020.

The debt office has directed interested parties to contact the stockbroking firms appointed as distribution agents by the office on its website

It is important to note that the FGN savings bond is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

It qualifies as securities in which trustees can invest under the Trustee Investment Act and can also be used 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 bond would be listed on the Nigerian Stock Exchange (NSE) and qualifies as a liquid asset for liquidity ratio calculation for banks.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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