Investment Alert: The FGN Savings Bond is now open for subscription

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The Federal Government of Nigeria, through the Debt Management Office (DMO), yesterday announced the opening of the March Savings Bond Offers.

According to a circular that was published on the DMO website, the two offers that are up for subscription are the 2-year FGN Bond which will be due on the 11th of March 2022, and the 3-year FGN Bond, which will be due on the 2nd of March 2020.

Note that the interest rates for the 2-year and 3-year FGN Bonds are 4.131% and 5.131%, respectively.

Offer for subscription officially opened on Monday March 2nd, 2020, and will close by Friday the 6th of March. Interested investors have been advised to contact any of the stockbroking firms that have been appointed as distribution agents by the DMO.

Investors should also note that the March FGN Savings Bond offers will be sold in the order below:

  • 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 N50,000,000.

Interest payment for the offers will be done quarterly while the bulletin repayment will be done on the maturity date.

What you need to know: The yields that were announced for the 2-year and 3 year March offers are lower than yields for the February 2020. Last month, the coupon on the 2-year FGN Savings Bond was 5.910% while the coupon on the 3-year FGN Savings Bond was 6.910%.

Last month, the DMO raised N656.577 million through two bond offerings.

Still on February’s FGN Bond offers, the DMO raised N295.02 million in the two-year paper and N361.557 million on the three-year paper. These accounted for a total of N656.577 million raised in February offers which, interestingly, is lower than what the DMO raised from the two papers in January this year.

The FGN Savings Bond is secured by the full faith and credit of Nigeria. It is also charged upon all of the country’s assets.

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