The Debt Management Office (DMO) has unveiled the initial bond offering for 2024, comprising two Federal Government of Nigeria (FGN) savings bonds, available for subscription.
The announcement was made on Monday, January 8, according to a statement seen by Naijaonpoint.
Details of the offers:
Two-year FGN savings bond due on January 17, 2026, at the interest rate of 11.033% per annum.
Three-year FGN savings bond due on January 17, 2027, at the interest rate of 12.033% per annum.
According to the DMO, the opening date is scheduled for January 8, concluding on January 12, with settlement slated for January 17. Additionally, coupon payments are expected on April 17, July 17, October 17, and January 17.
FGN Savings 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.
Interest is payable quarterly while bullet repayment (principal sum) is on maturity.
FGN savings bonds are considered investment options for trustees under the Trustee Investment Act. They also count as government securities, making them eligible for tax exemption for pension funds according to the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA).
These bonds are listed on the Nigerian Exchange, and they are seen as liquid assets when banks calculate their liquidity ratio.
In 2023, the Federal Government raised about N16.76 billion through FGN Savings Bonds, with the interest rates ranging between 9.6% and 13.287%.
However, in contrast, the Federal Government raised about N6.658 trillion through treasury bills in the same year, a signification of the level of importance placed on both short-term debt instruments.