Subscription for October 2019 FGN Savings Bond Closes Today

By Dipo Olowookere

The sale of the Federal Government of Nigeria (FGN) savings bond for the month of October 2019 will close on Friday, October 11, 2019 (today), Business Post reports.

Subscription for the exercise commenced this Monday and the Debt Management Office (DMO), which sells the debt instrument, is offering the papers in two maturities.

According to the circular from the DMO, investors can either buy the 2-year FGN savings bond due October 16, 2021 at 11.24 percent per annum or the 3-year FGN savings bond due October 16, 2022 at 12.24 percent per annum.

This can be done with the purchase of 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.

According to the debt office, the interest would be paid to investors quarterly, while at redemption, government would make a bullet repayment on the maturity date.

The FGN savings bond is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

It qualifies as securities in which trustees can invest under the Trustee Investment Act and treated 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.

The FGN savings bonds are listed on the Nigerian Stock Exchange (NSE) and can be used as a liquid asset for liquidity ratio calculation for banks

The debt instrument can be subscribed to through stockbroking companies in the country accredited by the debt management office. A list of them can be assessed on the online platform of the agency.

The FGN savings bond was created to allow low income earning Nigerians to be part of the capital market. proceeds of the exercise is always used by government to carry out some critical infrastructural projects in the country.