FG offers August Savings Bonds at 10.7%, 11.7% interest rates - Ripples Nigeria
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FG offers August Savings Bonds at 10.7%, 11.7% interest rates



Nigerian govt to float second N100bn Sukuk Bond in December

The Federal Government has offered for subscription two savings bonds to investors for August 2018 as part of the capital raising for the 2018 Budget.

The Debt Management Office (DMO), which is offering the subscription on behalf of the Federal Government of Nigeria (FGN), said the subscription started on Monday, August 6, 2018, and is expected to close on Friday, August 10, 2018.

The DMO, in a circular released on Monday, noted that the two-year savings bond would be offered with an interest rate of 10.668 percent per annum, while the three-year savings bond would be sold with an interest rate of 11.668 percent per annum.

The nation’s debt office assured that the bonds are backed by the full faith and credit of the Federal Government with quarterly coupon payments to bondholders.

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.

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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, it also helps in promoting savings culture and enhancing financial inclusion in the country as income earned from it is exempted from taxes.

It would be recalled that the DMO had raised N66.9 billion at the FGN Bond Auction on July 25, 2018.

At the Auction, the DMO offered FGN Bonds in three tenors of 5, 7 and 10 years to give its diverse investor base an opportunity to choose their preferred tenors.

According to DMO, investors showed a strong preference for the 10-year Bond with a total subscription of N50.51 billion compared to the N40 billion that was offered.

The FGN Bonds at the auction were allotted at 13.69 percent, 14.00 percent and 14.2999 percent for the 5-year, 7-year and the 10-year bonds respectively.

By Oluwasegun Olakoyenikan


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