The Federal Government of Nigeria has offered for subscription two savings bonds for the month of May with higher interest rates compared with those issued in the previous two months.
The debt instruments comprising two-year and three-year savings bonds would be offered at 11.745 percent and 12.745 percent, respectively. These correspondingly represent higher rates compared with 11.276 percent and 12.276 percent issued in April, and 11.62 percent and 12.62 percent in March.
The Debt Management Office (DMO), which is offering the bonds on behalf of the Federal Government, said it started receiving applications for the bond subscription on Monday, May 6 and the window is expected to close on Friday, May 10, 2019 with settlement date of May 15.
According to the debt office, the two-year and three-year tenors would have quarterly coupon payment dates of August 15, November 15, February 15 and May 15, with maturing dates of May 15, 2021 and 2022, respectively.
The DMO assured that the bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country. 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 and in multiples of N1,000 thereafter, subject to a maximum subscription 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, as well as help in promoting savings culture and enhancing financial inclusion in the country as income earned from the bonds is exempted from taxes.
The DMO advised interested investors to contact the stockbroking firms appointed as distribution agents by the DMO on its website.
OLUWASEGUN OLAKOYENIKAN
