FG offers two savings bonds for subscription in Sept

The Federal Government has offered for subscription two savings bonds to investors for September 2018, the Debt Management Office (DMO) said on Tuesday.

The DMO, which is offering the subscription on behalf of the Federal Government of Nigeria (FGN), said the subscription started on Monday, September 3, 2018, and is expected to close on Friday, September 7, 2018.

According to the circular released by the debt office, a two-year savings bond would be offered with an interest rate of 11.364 percent per annum, while the three-year savings bond would be sold with an interest rate of 12.364 percent per annum.

The DMO assured that the bonds are backed by the full faith and credit of the Federal Government with quarterly coupon payments to bondholders.

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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.

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 said the Federal Government bond auction for August 2018 aimed at funding capital expenditure in the 2018 Budget was oversubscribed to the tune of over N100 billion.

At the auction, three tenors of 5, 7 and 10 years were offered to give the investors an opportunity to choose their preferred tenors.

“A total of N100.09 billion was allotted to competitive and non-competitive bidders at the Auction and the proceeds will provide additional financing for the implementation of the 2018 Appropriation Act,” the DMO said.

 

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