FG Lists N418m New Savings Bonds

The Federal Government has listed its latest issuances under its Federal Government of Nigeria Savings Bond (FGNSB) on the Nigerian Exchange (NGX) Limited. The listing of the two tranches of the FGNSB issued earlier this month paved the way for bondholders to trade on their holdings.

The government had offered a 2-Year FGN Savings Bond due November 10, 2023 at a coupon of 7.376 per cent per annum. It also simultaneously offered a 3-Year FGN Savings Bond due November 10, 2024 at coupon of 8.376 per cent per annum. The July 2021 offer was the 53rd tranche of the savings bond, introduced in 2017.

Regulatory documents showed that the government raised about N418 million under the savings bonds in November 2021.

A total of 133,407 units of the two-year bond valued at N133.41 million were listed at par value of N1,000 while a total of 285.44 million units of the three-year bond valued at N285.44 million were listed at par value of N1,000.

The coupon payment dates for the bonds, which pay interest rate quarterly are February 10, May 10, August 10 and November 10 respectively.

The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilisation 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.

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

GTI Securities Limited, one of the authorised distribution agents for the FGNSB, noted that the savings bonds help to deepen national savings culture while providing opportunity to all Nigerians irrespective of income level to contribute to and benefit from national development.

According to the stockbroking firm, FGNSB enables all Nigerians opportunity to participate in and benefit from the favourable returns available in the capital market.

GTI Securities noted that the savings bonds are acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity.

The bonds are usually listed on the stock exchange for trading, thus providing liquidity for investors who want to exit before maturity.

Savings bonds are good for savings towards retirement, marriage, school fees and house projects among other targets while assuring on its safety as the bonds are backed by the full faith and credit of the Federal Government of Nigeria.