FG Lists Fresh Savings Bonds On NGX

The Federal Government at the weekend listed its latest monthly issuances of savings bonds on the Nigerian Exchange (NGX) Limited, paving the way for investors to trade on the bonds issued in September 2021.

The Debt Management Office (DMO), which oversees government’s debt issuances and management, had in September offered a two-year FGN Savings Bond due September 15, 2023 at a coupon of 7.92 per cent per annum. It also simultaneously offered a three-year FGN Savings Bond due September 15, 2024 at coupon of 8.92 per cent per annum.

The two bonds were continuation of the monthly Federal Government of Nigeria (FGN) Savings Bonds (FGNSBs). The September 2021 offer was the 51st tranche of the savings bond, introduced in 2017.

Regulatory circular at the weekend indicated that a total of 86,381 units of the two-year bond valued at N86.38 million and a total of 561,303 units of the three-year bond worth N561.30 million were listed at the NGX. The bonds were listed at par value of N1,000 per unit.

The coupon for the two-year bond was 7.915 per cent while the three-year bond carries annual coupon of 8.915 per cent. The coupon payment dates for the bonds, which pay interest rate quarterly December 15, March 15, June 15, and September 15.

The government had in August 2021 raised N808.2 million through its August FGNSBs. The bonds were subsequently listed on the NGX. A total of 204,965 units of the 8.864 per cent FGNSB August 2023 bond valued at N204.965 million were listed at par value of N1000. The two-year tenured bond had a maturity date of August 11, 2023.

Also, a total of 603.248 million units of the FGNSB August 2024 bond valued at N603.248 million were listed at par value of N1, 000. The three-year tenured bond had a maturity date of August 11, 2024.

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.