The Federal Government at the weekend listed its latest monthly issuance of savings bonds on the Nigerian Exchange (NGX), paving the way for investors to trade on the bonds issued earlier this month.
The Debt Management Office (DMO), which oversees the government’s debt issuances and management, had on February 7, this year, issued a two-year FGN Savings Bond due February 7, 2024 at a coupon of 7.220 per cent per year. It also simultaneously issued a three-year FGN Savings Bond due February 7, 2025 at a coupon of 8.220 per cent per annum.
The two bonds were continuation of the monthly Federal Government of Nigeria (FGN) Savings Bonds (FGNSBs). The February 2022 issuances were the 56th tranche of the savings bond, introduced in 2017.
Regulatory circular at the weekend indicated that a total of 163,689 units of the two-year bond valued at N163.689 million and a total of 483.109 million units of the three-year bond worth N483.109 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 May 16, August 16, November 16 and February 16.
The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilisation 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 Nigerians irrespective of income level to contribute to and benefit from national development.
According to the stockbroking firm, FGNSB enables all 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 of Nigeria.