FG Offers Investors Two Savings Bonds at 12.1%, 13.1%

By Dipo Olowookere

The Nigerian government is selling its monthly two-tenor savings bonds to investors for the month of January 2019.

The exercise is conducted by the Debt Management Office (DMO) on behalf of the Federal Government of Nigeria (FGN).

In a statement issued by the debt office, intending investors have the opportunity to subscribe to the two-year papers offered at 12.125 percent or the three-year notes offered at 13.125 percent.

It was disclosed that investors can buy 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.

In addition, the bond subscription period will run from 8.00am on Monday, January 7, 2019 till 12.00 noon of Friday, January 11, 2019.

The DMO said savings bonds qualify as securities in which trustees can invest under the Trustee Investment Act.

They also qualify 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.

Furthermore, the savings bonds would be listed on the Nigerian Stock Exchange (NSE) and they qualify as a liquid asset for liquidity ratio calculation for banks, with the interests paid quarterly to subscribers. Finally, the savings bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.