The Debt Management Office (DMO) has commenced auction on two-year and three-year Federal Government of Nigeria (FGN) Savings Bonds for the month of March at lower interest rates.
The two-year and three-year Savings Bonds would be offered at 11.62 percent and 12.62 percent interest rates per annum, respectively as against 12.05 percent and 13.05 percent interest rates placed on the instruments in the previous auction.
The two-year bond is expected to mature on March 13, 2021, while the three-year debt instrument would be due on March 13, 2022.
The DMO, which offers the bonds for subscription on behalf of FGN, said subscription for the FGN Savings Bonds began on Monday, March 4, 2018, and is expected to close on Friday, March 8, 2018.
The state-funded debt agency assured that the bonds, which have quarterly coupon payments from the issue date, are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the nation. It also guaranteed a bullet repayment of the principal on the maturity date.
The bonds are offered at N1,000 per unit subject to a minimum subscription of N5,000, with increases thereafter in multiples of N1,000 up to a maximum of N50 million.
The FGN Savings Bonds are targeted at encouraging low-income earners to save and earn more interests than the regular bank savings.
The bonds are issued to assist the government finance its budget deficit, but also help in promoting savings culture and enhancing financial inclusion in the country as income earned from it is exempted from taxes.
OLUWASEGUN OLAKOYENIKAN
