Business Post Contributor
By Ashemiriogwa Emmanuel
Subscription for the Federal Government of Nigeria (FGN) savings bond for August 2021 targetted at low-income earners in the country has commenced.
The sale of the debt instrument, which is issued monthly by the Debt Management Office (DMO), started on Monday and will close on Friday, August 9.
According to the circular issued by the debt office and seen by Business Post, the papers are auctioned in the usual two maturities; 2-year and 3-year with interest rates of 8.86 per cent and 9.86 per cent respectively.
In the circular, the DMO said for the 2-year note, the maturity date is set for August 11, 2023, while the 3-year paper will be due on August 11, 2024, marking when intending subscribers will be credited their initial investments by the government.
The notice explained that payment of the coupon will be reimbursed quarterly, that is, November 11, February 11, May 11, and August 11, as the settlement date is marked for August 11, 2021.
To purchase the note, investors are required to pay for at least five units at N1,000 each with the maximum of 50,000 units, toalling N50 million.
Interested investors who want to be part of the subscription are expected to contact the stockbroking firms appointed as distribution agents by the debt management office.
The FGN savings bond is a debt instrument issued to allow low-income earners to contribute to the development of the nation while receiving competitive returns by borrowing government money to implement pressing infrastructure across the country.
The FGN savings bond is tax-free, meaning investors are not required by law to pay tax from the proceeds of the debt instrument, while those who purchase the bond are guaranteed of getting their money back at maturity.
