FG Lists December Savings Bonds

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Nigeria Debt Management Office (DMO) Logo.

The Federal Government has listed the latest tranches of the Federal Government of Nigeria Savings Bond (FGNSB) on the Nigerian Stock Exchange (NSE), paving the way for investors to trade on the debts.

In the first listing, a total of 3,088 units of a two-year savings bond with a coupon of 1.32 per cent and maturity of December 2022 were listed on the sovereign debt segment of the Exchange.

The government also listed a total of 48,417 units of a savings bond with a tenor of three year and coupon of 1.82 per cent, which will mature in December 2023. The two bonds were listed at a par value of N1,000 each.

The two bonds were issued on December 16, 2020 as part of the government’s monthly FGNSB issuance calendar.

With the offer of a coupon of 1.82 per cent as annual return to investors for a three-year bond and 1.32 per cent for a two-year bond, the coupons showed considerable decline in returns on fixed-income securities as government and corporate take advantage of liquidity in the system to restructure into low-cost debts.

The two-year FGNSB due on November 11, 2022 offered a coupon of 1.759 per cent per annum, lower than 2.453 per cent per annum of the same bond issued in October 2020. The three-year FGNSB due November 11, 2023 offered a coupon of 2.759 per cent, as against 3.453 per cent per annum offered by same bond issued in October 2020.

Minimum subscription to the bonds, offered at N1,000 per unit, was N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million. The coupon payment dates for the newly issued bonds, which pay interest rate quarterly, are March 16, June 16, September 16 and December 16 respectively.

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

 

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