Aduragbemi Omiyale
By Aduragbemi Omiyale
The Debt Management Office (DMO) has disclosed that it allotted an FGN savings bond worth N1.14 billion to those who subscribed for the paper last month.
In a disclosure on its website, the DMO said the notes were sold to 328 investors across the two maturities offered for sale during the exercise, which took place between April 4 and 8.
The agency had auctioned a 2-year savings bond to investors at 7.338 per cent and a 3-year paper at 8.338 per cent.
In the notice, the debt office stated that it allotted N503.5 million worth of the 24-month tenor to 111 subscribers, while N634.9 million worth of the 36-month was sold to 217 subscribers.
Investors had bought a unit of the FGN savings bond at N1,000 subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
The savings bond, unlike the regular FGN bond, is targeted at low-income earners and is usually not attractive to institutional and high-net-worth investors (HNIs), which is why the value of the allotment is not high.
It was introduced after the Central Bank of Nigeria (CBN) increased the minimum subscription rate of the treasury bills from N10,000 to N50 million.
The DMO, as a way to encourage retail investment in the financial market, especially on the debt side, created the savings bond, which allows citizens to also lend money to the federal government to finance budget deficits.
Funds raised from the sale of the debt instrument are used to finance a few projects approved by the National Assembly in the budget.
