Modupe Gbadeyanka
By Modupe Gbadeyanka
Subscriptions for the monthly Federal Government of Nigeria (FGN) Savings Bond for May 2019 will close today.
The exercise for this month opened on Monday, May 6, 2019 and interested investors have till 12 noon today to subscribe.
The Savings Bond was introduced by the Nigerian government to accommodate small income earners have the opportunity of enjoying benefits of the fixed income market.
The debt instruments are sold by the Debt Management Office (DMO) on behalf of federal government, with interests paid quarterly.
For this month’s sale, the debt office is offering two maturities; the 2-year paper and the 3-year paper sold at 11.745 percent and 12.745 percent respectively.
Subscribers will have to pay 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 risk-free debt instrument is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.
The bonds qualify as securities in which trustees can invest under the Trustee Investment Act. They are 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. They are listed on the Nigerian Stock Exchange (NSE) and qualify as a liquid asset for liquidity ratio calculation for banks.
