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The Debt Management Office (DMO) on behalf of the Federal Government of Nigeria (FGN) has started offering Savings Bond for this month of April.
The subscription for the five-day offer opened on Monday April 9, 2018, with a minimum subscription of N5, 000 and maximum subscription of N50million and closes by 12 noon on Friday April 13, 2018.
FGN Savings Bond is a scrip-less security with allotment done electronically into investor’s CSCS account; and investors will receive notifications. The Savings Bond is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.
Early this year (January 25), the Debt Management Office updated list and contact details of its accredited distribution agents to market FGN Savings Bond. The Agents are currently 135 in number, according to DMO list.
The Central Bank of Nigeria is the Registrar and Settlement Agent for FGN Savings Bond; while Central Securities Clearing System Plc (CSCS) plays the Custody, Clearing and Settlement roles.
The 2-Year FGN Savings Bond due April 18, 2020 is currently being offered at a coupon rate of 10.75 percent per annum; while the 3-Year FGN Savings Bond due April 18, 2021 is also offered at a coupon rate of 11.75 percent per annum.
Coupon will be paid quarterly and bullet principal payment on maturity – directly into investors’ bank account. The coupon rate is the rate of interest paid by the bond issuer (Debt Management Office on behalf of Federal Government of Nigeria) on the bond’s face value.
FGN Savings Bond is an investment vehicle offered by the Sovereign that serves to meet the investment needs of low-high income citizens in the economy by enhancing their savings culture while also acting as an efficient debt management tool for the Nigerian Treasury.
It is of immense benefit to individual savers, small businesses, co-operatives, foundations, nonprofit organisations, and other investors subject to the maximum limit of N50million. Nigerian Citizens resident abroad and foreigners resident in Nigeria are eligible.
Every month, the Federal Government issues Savings Bond to deepen the national savings culture; provide opportunity to all citizens, irrespective of income level to contribute to national development; enable all citizens participate in and benefit from the favourable returns available in the Nigerian Capital Market; and diversify funding sources for the Government.
Iheanyi Nwachukwu
