Nigerian Government floats new savings bond

Mar 05, 2019
The Federal Government of Nigeria is again offering for subscription savings bonds with a tenor of two and three years, a circular on Monday from the Debt Management Office, DMO, has urevealed.
 
According to the DMO, it was authorised to receive applications for the savings bond on behalf of the Federal Government.
 
The statement also disclosed that the two-year savings bond will be due on March 13, 2021 and has an interest rate of 11.62 per cent per annum, while the three-year savings bond, which has an annual interest rate of 12.62 per cent, will be due on March 13, 2022.
 
The DMO statement also said the offer for subscription opened on Monday and will close on Friday, March 8, adding that the settlement date had been scheduled for March 13, while the coupon would be paid on June 13, September 13, December 13 and March 13, 2019.
 
The statement reads: “The bonds are offered at N1,000 per unit, subject to a minimum subscription of N5,000 and in multiples of N1,000 and a maximum subscription of N50m.
 
“The bonds, which are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country, qualify as securities in which trustees can invest under the Trustee Investment Act. Interest is payable quarterly and the bullet repayment is on the maturity date.”
 
According to the DMO, the bonds also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds, among other investors, adding that the bonds would also be listed on the Nigerian Stock Exchange and would qualify as a liquid asset for liquidity ratio calculation for banks.
 
“Interested investors should contact the stockbroking firms appointed as distribution agents by the Debt Management Office,” the statement added.
 
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