Fed Govt lists November savings bond

 Taofik Salako, Deputy Group Business Editor

THE Federal Government has listed two new tranches of the Federal Government of Nigeria Savings Bond (FGNSB) on the Nigerian Stock Exchange (NSE), paving the way for investors to trade on the debts.

In the first listing, a total of 27,920 units of a two-year savings bond with a coupon of 1.759 per cent and maturity of November 2022 were listed on the sovereign debt segment of the Exchange.

The government also listed a total of 295,632 units of a savings bond with a tenor of three year and coupon of 2.759 per cent, which will mature in November 2023. The two bonds were listed at a par value of N1,000 each.

The two bonds were issued earlier this month as part of the government’s monthly FGNSB issuance calendar.

Application list for the November 2020, 41st tranche of the FGNSB, had opened on Monday November 2, 2020 and closed by the end of business on Friday, November 6, 2020. Settlement date was Wednesday, November 11, 2020.

With the offer of a coupon of 2.759 per cent as annual return to investors for a three-year bond and 1.759 per cent for a two-year bond, the coupons showed considerable decline in returns on fixed-income securities as government and corporate takes advantage of liquidity in the system to restructure into low-cost debts.

The two-year FGNSB due on November 11, 2022 offered a coupon of 1.759 per cent per annum, lower than 2.453 per cent per annum of the same bond issued in October 2020. The three-year FGNSB due November 11, 2023 offered a coupon of 2.759 per cent, as against 3.453 per cent per annum offered by same bond issued in October 2020.

Minimum subscription to the bonds, offered at N1,000 per unit, was N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

The coupon payment dates for the bonds, which pay interest rate quarterly, are February 11, May 11, August 11 and November 11 respectively.

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.