Business Post Contributor
By Sodeinde Temidayo David
Retail investors who missed out on the FGN savings bond last month now have the opportunity to purchase the debt instrument targeted at them.
The Debt Management Office (DMO), which sells the securities on behalf of the Federal Government of Nigeria, issued a circular to announce the exercise for September.
According to the disclosure obtained by Business Post, subscriptions for the bond sale will last five days as it commenced on Monday, September 6 and will end on Friday, September 10.
The FGN savings bond is mainly for low-income earners so as to encourage them to save and earn more income while supporting the government with funds to carry out some critical projects across the country.
The debt office said it would auction the September FGN savings bond in two maturities, just like it has always done in the past; a two-year note with maturity on September 15, 2023, and a three-year note with maturity on September 15, 2024.
The DMO is offering to sell the two-year bond at a coupon rate of 7.915 per cent per annum, while the three-year bond is going for a coupon rate of 8.915 per cent per annum.
According to the offer notice, the interest payments would be done quarterly, with dates fixed for December 15, March 15, June 15, and September 15 as the settlement date is scheduled for September 15, 2021.
To purchase the bonds, an investor would be required to pay N1,000 per unit subject to a minimum of five units subscription of N5,000 and the maximum of 50,000 units at N50 million.
The notes can be bought through stockbroking firms appointed as distribution agents by the debt management office.
The savings bonds are tax-free with competitive fixed interest rates to be paid every quarter and can be traded on the Nigerian Exchange (NGX) Limited to provide an exit route before maturity. They can also be used as collateral for loans.
