The Federal Government at the weekend listed its latest monthly issuances of savings bonds on the Nigerian Exchange (NGX), paving the way for investors to trade on the bonds issued in December 2021.
The Debt Management Office (DMO), which oversees government’s debt issuances and management, had last December offered a two-year FGN Savings Bond due December 15, 2023 at a coupon of 7.322 per cent per annum. It also simultaneously offered a three-year FGN Savings Bond due December 15, 2024 at coupon of 8.322 per cent per annum.
The two bonds were continuation of the monthly Federal Government of Nigeria (FGN) Savings Bonds (FGNSBs). The December 2021 offer was the 54th tranche of the savings bond, introduced in 2017.
Regulatory circular at the weekend indicated that a total of 99,014 units of the two-year bond valued at N99.014 million and a total of 203,036 units of the three-year bond worth N203.036 million were listed at the NGX. The bonds were listed at par value of N1,000 per unit.
The coupon payment dates for the bonds, which pay interest rate quarterly, are March 15th, June 15th, September 15th and December 15th.
The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilization of savings and investments. Minimum subscription to the FGNSB is usually N5, 000 while the bond pays coupon or interest rate on a quarterly basis.
Usually, the minimum subscription to the bonds, offered at N1,000 per unit, is N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
GTI Securities Limited, one of the authorised distribution agents for the FGNSB, noted that the savings bonds help to deepen national savings culture while providing opportunity to all Nigerians irrespective of income level to contribute to and benefit from national development.
According to the stockbroking firm, FGNSB enables Nigerians opportunity to participate in and benefit from the favourable returns available in the capital market.
GTI Securities noted that the savings bonds are acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity.
The bonds are usually listed on the stock exchange for trading, thus providing liquidity for investors who want to exit before maturity.
Savings bonds are good for savings towards retirement, marriage, school fees and house projects among other targets while assuring on its safety as the bonds are backed by the full faith and credit of the Federal Government.
– The Nation