Investments: DMO lists 2 FGN savings bonds for subscription, targets N720bn Q3

*The Debt Management Office announces the listing of two Federal Government of Nigeria’s savings bonds for subscription for July 2022, says the bonds are backed by the full faith and credit of the Federal Government and charged upon the general assets of the country

Isola Moses | ConsumerConnect

The Debt Management Office (DMO) has announced the listing of two Federal Government of Nigeria (FGN) savings bonds for subscription for July 2022.

The DMO Monday, July 4, stated that the first is a two-year savings bond due June 15, 2024, at an interest rate of 8.2 percent per annum.

The second is a three-year savings bond due on June 15, 2025, at the n interest rate of 9.2 per cent per annum.

The bonds were offered at N1,000 per unit, it noted.

They are subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million, agency report said.

The DMO stated: “Opening date for both offers is June 6, while the closing date is June 10.

“Settlement date is June 15, and coupon payment dates are Sept. 15, Dec. 25, March 15 and June 15.

“Interest is payable quarterly and bullet repayment is on the maturity date.”

According to the  Office, the bonds were backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.

They also qualify as liquid assets for liquidity ratio calculation in banks.

It further said: “They qualify as securities in which trustees can invest under the Trustee Investment Act.

“They also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption and pension fund amongst other investors.

“They are listed on the Nigerian Stock Exchange Limited.”

Meanwhile, the Federal Government is set to generate about N720 billion in the third quarter of 2022 from FGN Bonds.

This is according to “FGN Bond Issuance Calendar For Third Quarter, 2022” as released by the Debt Management Office (DMO).

The calendar indicated that the DMO would re-open nine previously issued FGN Bonds between July and September.

The DMO, July 18, will re-open a 13 percent, March 2025 FGN Bond valued at between N70 billion to N80 billion.

It has a maturity date of two years, eight months, with original 10-year tenor.

Also on July 18, the DMO will re-open a 12.5 percent, April 2032 FGN Bond valued at between N70 billion to N80 billion.

It has nine years, nine months term-of-maturity; with 10-year original tenor.

The office will, again, re-open a 13 per cent, Jan. 2042 FGN Bond valued at between N70 billion to N80 billion on the same date.

It has 19 years, six months term-of-maturity, and an original tenor of 20-year.

On Aug. 15, the DMO will re-open the 13.53 per cent, March 2025 FGN Bond, valued at between N70 billion to N80 billion, with two years, seven months as term-of-maturity.

It has an original tenor of 10-year.

On the same date, it will re-open the 12.50 per cent, April 2032 FGN Bond, valued at between N70 billion to N80 billion; with term-of-maturity of nine years, eight months.

It has a 10-year original tenor.

Again, on Aug. 15, it will re-open the 13 per cent, 2042 FGN Bond, valued at between N70 billion to N80 billion; with 19 years, five months as term-of-maturity.

It has a 20-year original tenor.

The calendar also shows that, on Sept. 19, the DMO will again re-open the 13.53 percent, March 2025 FGN Bond, valued at between N70 billion to N80 billion.

It has two years, six months term-of-maturity and 10-year original tenor.

Again, on Sept 19, the DMO will re-open 12.50, April 2032 FGN Bond valued at between N70 billion and N80 billion, with nine years, seven months as term-of-maturity.

It has a 10-year original tenor (length of time ).       .

On the same date, the office will, again, re-open the Jan. 2042 FGN Bond valued at between N70 billion to N80 billion; with 19 years, four months as term-of-maturity.

It has original tenor of 20-year.

Re-opening a Bond issue refers to issuing additional amounts of a previously issued Bond, report stated.

Re-opened Bonds have the same maturity date and interest rate as the original bonds, but they are sold on different dates and usually at a different price.

The DMO, however, said that the calendar was provisional and could be subject to change at short notice.

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