By Aduragbemi Omiyale
In order to attract investors, especially at the beginning of the year when some look for money to address pressing obligations, the Debt Management Office (DMO) is offering a higher coupon rate for the Federal Government of Nigeria (FGN) savings bond.
The debt office, in a circular, has called for subscriptions for the January FGN savings bond and it is selling the investment tool in two maturities as it normally does.
According to the notice, the 2-year FGN savings bond maturing on January 19, 2024, will go for 7.54 per cent per annum, while the 3-year FGN savings bond expected to mature on January 19, 2025, will sell for 8.54 per cent per annum.
At the previous exercise, which took place last month, the 2-year bond was offered at 7.32 per cent, while the 3-year bond went for 8.32 per cent.
Subscription for the two papers opened on Monday, January 10, 2022, and will close on Friday, January 14, 2022, with the coupon payment dates fixed for April 19, July 19, October 19, January 19 of every until maturity.
Intending subscribers are required to get in touch with accredited stockbrokers and buy the notes at 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.
The FGN savings bond is backed by the full faith and credit of the Nigerian government and is charged upon the general assets of the country.
The bond qualifies as securities in which trustees can invest under the Trustee Investment Act and also qualifies as government securities within the meaning of the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds, amongst other investors.
The FGN savings bond further qualifies as a liquid asset for liquidity ratio calculation for banks and after the sale at the primary market, it would be listed on the Nigerian Exchange (NGX) Limited to provide an exit route for investors who wish to sell before maturity at the secondary market.
