FG Offers 9.2% Return For New Three-year Savings Bonds

The Federal Government has opened application list for the June tranches of its monthly retail bond issuance, otherwise known as Federal Government of Nigeria Savings Bond (FGNSB).

The Debt Management Office (DMO), which oversees government’s debt issuance and management, is offering two tranches of FGNSBs with two-year and three-year tenors. The issuance is the 60th tranche of the savings bond, introduced in 2017.

The government is offering the two-year sovereign retail bond at a coupon of 8.205 per cent with maturity on June 15, 2024.

It is also simultaneously offering three-year FGNSBs at a coupon of 9.205 per cent with maturity on June 15, 2025.

Minimum subscription to the pro-low savers bonds is N5,000 with maximum subscription per subscriber capped at N50 million.

Application list for the bonds closes on Friday June 10, 2022.

The FGNSBs are designed to have most of the features of the existing sovereign bond but with other benefits to the bondholder, including low amount of minimum subscription, listing on stock exchange and trading on the bonds.

It will also be backed by the full faith of the Federal Government of Nigeria and is therefore deemed risk-free.

The coupon is paid on a quarterly basis, providing investors with a regular stream of incomes.

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.

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