The Debt Management Office (DMO) has announced the opening of offers for subscription to two Federal Government of Nigeria (FGN) savings bonds for September 2024.
This announcement was made in a statement by the DMO on Monday in Abuja.
The statement indicates that the first offer, a two-year savings bond, maturing on September 11, 2026, is offered at an interest rate of 17.202%, while the second, a three-year savings bond, is available at 18.202%.
The subscription period, which commenced on September 2, will last for five days, ending on September 6.
Each unit of the bond is priced at N1,000, with a minimum subscription requirement of N5,000 and subsequent multiples of N1,000. The maximum allowable subscription is N50,000,000.
Interest payments on FGN bonds are made quarterly, with settlement planned for September 11, 2024, and quarterly coupon payments scheduled for December 11, March 11, June 11, and September 11.
The interest rate of 18.202% on FGN savings bonds reflects the prevalent high-interest rate environment in the country, representing an increase of 6.17 percentage points from the same period last year.
The increase in interest rate for FGN bonds is a result of the effort of the Central Bank of Nigeria (CBN) to control inflation and stabilize the foreign exchange market by luring Foreign Capital Investments (FPIs).
To rein down inflation, CBN increased interest rates by 800 basis points during the course of four meetings of the Monetary Policy Committee (MPC), attracting a lot of attention to the FGN savings bonds offer.
The DMO has also announced that the savings bonds are backed by the full faith and credit of the federal government of Nigeria, and chargeable on the country’s general assets. They qualify as securities in which trustees can invest under the Trustees Investment Act and are listed on the Nigerian Exchange Limited (NGX).
